That depends. First, let's look at the definition of a life settlement.

A life settlement is the sale of a life insurance policy covering a person who has a limited life expectancy -- normally 10 years or less. It presents an opportunity to get money from an older person's existing life insurance policy and repurpose those funds for whatever financial needs they may have. Until recently, the owner of an unneeded or unwanted policy had two options – sell the policy back to the institution that issued it for its cash surrender value (if any) or allow the policy to lapse. But today, you can sell your life insurance policy on the secondary market.

Is this a good option? That depends on how you feel. Personally, I wouldn't like the fact that a stranger would benefit from my death. However, if you need the money for medical care or other financial purposes it may be a viable option for you. If you think a life settlement is the way to go, be sure to shop around because there is no set price on what a life settlement company will offer you for your policy. Company A may offer you a lot more than company B.