If you’re 65 or older and own a life insurance policy, you may be able to sell it for far more than what your insurance company would offer if you surrendered it—or worse, let it lapse and get nothing.
In fact, according to the Life Insurance Settlement Association (LISA), seniors who sold their policies through a life settlement received 6.5 times more than the cash value offered by their insurer.
“Your life insurance is an asset—just like a house or an investment account. You’re allowed to sell it,” says Bryan Nicholson, Executive Director of LISA.
What Exactly Is a Life Settlement?
A life settlement is when you sell your life insurance policy to a third party (not the insurance company). Once sold:
The buyer takes over paying the premiums.
You receive a lump-sum cash payout.
The buyer eventually collects the death benefit when you pass away.
Most deals involve seniors 65+ with policies worth $100,000 or more, but younger individuals with certain health conditions may also qualify.
Why Do People Sell Their Policies?
Life doesn’t always go as planned—and your insurance needs may change. Common reasons include:
The policy was originally purchased to cover a mortgage or spouse, but the need no longer exists.
Premiums have become too expensive to keep up with.
Extra funds are needed for medical expenses, long-term care, or retirement income.
Extra funds are needed for medical expenses, long-term care, or retirement income.
Example:
Imagine Mary, a 72-year-old widow who bought a $250,000 policy years ago to protect her husband. Now, her children are financially stable, but her policy costs nearly $500 a month. Instead of letting it lapse, she sells it for $60,000 in cash—far more than the $9,000 her insurance company would have offered as a surrender value. That money helps cover her healthcare costs and allows her to enjoy retirement without the stress of ongoing premiums.
Who Buys Life Insurance Policies?
Large financial institutions—like pension funds, hedge funds, banks, and insurance companies—are often the buyers. For them, it’s a steady investment with predictable returns that isn’t tied to the ups and downs of the stock market.
How Is the Value of a Policy Decided?
Several factors determine how much you could get for your policy, including:
Your life expectancy based on health history.
The death benefit amount.
The annual premiums required to maintain it.
Whether it’s a permanent or term policy (permanent policies are usually worth more).
How Does the Selling Process Work?
Most policyholders work with a life settlement broker to get the best deal. Here’s the typical process:
Apply – Fill out a short, confidential application. No medical exam required, but health records are reviewed.
Evaluation – An appraiser looks at your policy and health details.
Offers – Potential buyers compete by making bids.
Sale – You accept the best offer, paperwork is finalized, and you receive your cash payment.
Brokers are usually paid through a success fee (20–30%), which is deducted from the sale only if the transaction closes.
Is Selling a Policy Common?
It’s still a niche market, but it’s growing quickly. In 2024, members of LISA completed nearly 2,700 life settlement deals, paying out more than $600 million to seniors. The industry is regulated in 43 states, covering about 90% of the U.S. population.
How Acrisure Can Help You
This is where companies like Acrisure come in. Acrisure is one of the top insurance brokerages in the world, helping individuals and businesses with customized insurance solutions.
If you’re considering a life settlement—or just trying to understand your insurance options—Acrisure can help you by:
Reviewing your current policy to see if selling it makes sense.
Exploring alternative solutions if keeping the policy is still beneficial.
Helping you find affordable coverage for life, home, auto, or business insurance if your needs have changed.
Guiding you with expert advice so you don’t leave money on the table.
Working with a professional ensures you make a well-informed decision—not just what benefits the insurance company, but what’s truly best for you and your family. If you’d like to explore your options, you can reach out at hello@abdulconnects.com. Abdul, working with Acrisure, will personally guide you through life insurance, retirement planning, or any coverage you need for peace of mind.
Bottom Line:
Your life insurance policy is more than just paperwork—it’s an asset that can unlock hidden value. If premiums are weighing you down or your policy no longer serves its purpose, selling it through a life settlement could put thousands back in your pocket when you need it most.