Life Settlements
If you own a life insurance policy you no longer need, want, or can afford, a life settlement may allow you to sell the policy for more than its cash surrender value.
The Basics
A life settlement is the sale of an existing life insurance policy to a third-party buyer.
In exchange, the policy owner receives a lump-sum payment, and the buyer assumes responsibility for future premiums and receives the death benefit when the insured passes away.
Reasons People Consider Life Settlements
Premiums have become too expensive to continue paying.
The insurance coverage is no longer needed or necessary.
Retirement income needs have changed over time.
Healthcare expenses have increased and require funding.
Business circumstances have changed, altering financial needs.
Do You Qualify?
Life settlements are not right for everyone — but for those who qualify, they can unlock significant value from a policy that might otherwise be abandoned. Here are the key criteria and common situations that make someone a strong candidate.
Most life settlements require the insured to be at least 65 years old, or younger with a serious health condition that has reduced life expectancy. The older you are and the more significant your health history, the higher the potential settlement offer.
Most buyers look for policies with a face value of $100,000 or more. Universal life, whole life, and convertible term policies are typically eligible. Pure term policies may qualify if they have remaining conversion rights or you have a significant health change.
The policy must be active and in good standing. Lapsed or surrendered policies are not eligible. If you are considering stopping premium payments, a life settlement evaluation should happen before — not after — you allow the policy to lapse.
Life changes often make a previously needed policy unnecessary — retirement, children grown and financially independent, divorce, business dissolution, or simply a shift in financial priorities. A life settlement converts that policy into immediate usable cash.
Common situations that qualify
Find Your Path
A life settlement can be a powerful financial tool — but only in the right situation. Select the scenario that best matches yours and take the next step toward finding out what your policy is worth.
Instead of letting the policy lapse and walking away with nothing, find out what a buyer will pay for it before you stop making payments.
Children are grown and financially independent. The spouse is well provided for. The policy’s original purpose no longer exists — and it may still have real market value.
Life settlement proceeds can fund retirement income gaps, pay for long-term care costs, or simply provide peace of mind during a transition in your financial life.
Key-person policies, buy-sell agreement policies, and executive benefit policies often become unnecessary after retirement, business sale, or ownership changes.
Curious whether your policy qualifies and what range of offers you might receive? A free, no-obligation evaluation takes only a few minutes and costs nothing.
Visit our Learning Center for plain-language guides on life settlements — how they work, tax implications, and what to expect from the process.
Benefits
A life settlement presents unique opportunities to leverage an asset you may no longer need or want to maintain. Consider the key advantages of this financial option:
Determine your options
Not every policy qualifies, but we can help determine whether a life settlement may be an option. Schedule a call with us and we can help guide the decision that works best for your situation.
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Jordan Shanbrom is an independent insurance broker. CA Lic. #0I14445. Life settlements are regulated financial transactions in California. This page is for informational purposes only and does not constitute financial, legal, or tax advice. Life settlement proceeds may be subject to income and/or capital gains tax. Consult a qualified tax professional regarding the tax implications of selling a life insurance policy. Settlement amounts vary based on policy type, face value, premiums, the insured’s age, and current health status.
