Life insurance buyers may want to know that they can get a good price for unwanted policies.

Arthur Fliegelman, a vice president at Moody’s Investors Service, New York, writes about the possible relationship between the primary life insurance market and the secondary life market in a new commentary.

Many life insurance industry executives worry that growth in life settlements could hurt life insurers’ profits, by increasing the percentage of older, sicker insureds who keep their policies until they die.

But news about problems in the life settlement market may have contributed to a dramatic slide in life sales has started to ease up only in the past few weeks, Fliegelman writes.

Some investors have lost money on life settlement investments this year, regulators have increased regulatory scrutiny of the life settlement industry, and availability of premium financing has dropped.

“These developments in the life settlement market have been a key factor in the dramatic decline in life insurance sales, especially among older age insureds that had been the industry’s greatest growth engine until recently,” Fliegelman writes.

But Fliegelman says an increase in life sales driven by a rebound in the life settlements market would be a mixed blessing.

“Even though life settlement-driven sales could be profitable for the life insurers if people continue to live longer than expected, we have concerns for the industry about the future growth of the life settlement market,” Fliegelman writes. “Higher life settlement sales would prompt greater scrutiny of–and possible reduction in–the tax advantages embedded in life insurance policies.”

Tax changes could lead to lower life insurance sales, Fliegelman warns.