How to Sell a Life Insurance Policy
If you own a life insurance policy you no longer need or can no longer afford, you may have more options than letting it lapse or surrendering it back to the insurer. Selling the policy through a life settlement may allow you to receive more than the cash surrender value — and a licensed broker can help you compare your options.
What Is a Life Settlement?
A life settlement is the sale of an existing life insurance policy to a licensed third-party buyer for a cash payment greater than the policy's cash surrender value but less than its net death benefit. The right to sell a policy as a personal asset was established by the U.S. Supreme Court in Grigsby v. Russell (1911), and life settlements are regulated in most U.S. states today.
Who May Qualify
While every situation is unique, policyholders who may qualify generally meet several of these criteria:
- The insured is age 65 or older, or younger with health changes since the policy was issued
- The policy has a face value of $100,000 or more
- The policy is universal life, survivorship universal life (SUL), or convertible term
- Business-owned policies, including key person and buy-sell coverage, may also be eligible
- Premiums have become expensive, or the coverage is no longer needed
How the Process Works
- Policy review — share basic policy and health information, with no cost or obligation
- Eligibility evaluation — your broker confirms whether the policy may qualify
- Market bidding — the policy is presented to multiple institutional buyers
- Offer selection — you compare offers and decide whether to accept; you can walk away at any point
- Closing and funding — ownership transfers and proceeds are delivered through a secure escrow process
Why Work With a Broker
A life settlement broker represents you — not the buyer. A broker's role is to create competition by presenting your policy to multiple buyers, which may improve the final offer. A provider, by contrast, is the buyer and makes an offer on its own behalf. Coastline Life Partners is a licensed broker compensated only when a transaction successfully closes, with no upfront fees.
Important Considerations
- Selling means giving up the policy's death benefit — discuss the decision with family and advisors
- Proceeds may have tax implications; consult a qualified tax professional
- Proceeds may affect eligibility for certain government assistance programs
Next Steps
A confidential policy review is the simplest way to understand whether your policy may qualify. There is no cost, no obligation, and no pressure — only the opportunity to make a more informed decision. You can also explore how a life settlement compares to surrendering or when timing matters most.
Frequently Asked Questions
Can I sell my life insurance policy if I'm healthy?
Yes, in many cases. Most life settlements involve policyholders age 65 or older whose coverage needs have changed — serious illness is not a requirement, although health is one factor buyers consider.
How much can I get for my policy?
Every policy is different, and no broker should quote you a value upfront. A policy's market value is determined by competitive bids from licensed institutional buyers, based on factors such as the insured's age and health, policy type, face value, and premium costs.
Do I need my insurance company's permission to sell?
No. Your policy is your personal property, and the right to sell it is established law. A licensed broker coordinates directly with your insurance carrier to process the ownership transfer.
Every life insurance policy and financial situation is unique. Policyholders should seek guidance from their own professional advisors before making decisions regarding a life insurance policy or life settlement transaction.