By Life Quotes, Inc. Staff

There are a variety of investment opportunities available to consumers, including the option of purchasing a person’s life insurance policy.

Known as life settlement, the practice of buying a person’s life insurance policy started as the AIDS epidemic ramped up in the 1980s. As those afflicted with the disease found it difficult to pay off their medical bills, some investors swept in to buy their insurance policies.

The way life settlement works is that the investor agrees to pay the premiums on a policy while the initial policy holder gets a cash payment. The reward for investors is the payout associated with the death of the insured person.

In recent years, life settlement has become popular with older adults who may not want to pay for life insurance premiums on policies that will end up being useless.

However, the industry may also be rife with unscrupulous investors who are trying to bilk consumers. Last year, California passed new regulations regarding the practice, including requiring licenses for companies and brokers that offer life settlements.

This article was originally published by Life Quotes, Inc.