Informational
Can I Sell My Life Insurance?
There are many factors that determine eligibility to sell a life insurance policy –– or, rather, whether a life insurance policy has “market value” that can be accessed. While any policy type can be sold, not all will have value on the secondary market. This means that, unfortunately, not everyone will qualify for a life settlement. In general, life settlement providers are looking at the following factors to determine eligibility and market value:
The size, or death benefit, of the policy.
In most cases, the minimum death benefit to qualify is $100,000. While smaller policies may qualify in limited situations, it’s typically due to there being multiple policies or the presence of a very serious medical condition.
The age and health of the insured.
The minimum age is generally 65, unless there are significant health impairments. Eligibility ultimately comes down to overall life expectancy since the buyer needs to understand the future premiums they could expect to pay to keep the policy in force.
The specifics of the policy.
While any policy type may qualify––even Term Life––details of the policy contract will need to be reviewed to understand any nuances or limitations of the coverage, including term conversion opportunities.
Other potential limitations or restrictions.
While rare, there are limitations in certain situations that may restrict your policy from being sold, such as the contestability period, state-specific restrictions, citizenship requirements, life insurance carrier rating, and the desirability of certain policy characteristics, among other factors.
Each policy must be reviewed holistically, taking into account each of the factors above to determine if the policy has market value. The details uncovered, along with overall market conditions, will reveal what your policy may be worth. Our life settlement calculator can help you understand if your policy is likely to qualify and will even provide an instant estimate of how much it may be worth. If you choose to sell your policy, you can elect to receive an all-cash payout, reduced coverage with no future premium payments, cash for life, or a combination of any of these options.
