http://seniorjournal.com/NEWS/Money/6-12-21-SeniorCitizensSelling.htm This is an article about the subject. The problem is it does not say how people sell and buy these insurances and how they make money from it. Anybody has an idea?
The policy holder names benefactors (spouse, children, relatives etc) in their policy in the event of death. Since the policy only pays out after a holders death, the holder sells the right to be named as benefactor to the highest bidder - in this life - so the holder can enjoy some of that cash before they die. This is probably done by older people who have no surviving family/friends, yet carry a significant policy. Just a guess, but makes sense.