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Life Insurance Policy Settlement Process

When it comes to selling your life insurance policy the process is not complicated. The option to sell an existing life insurance policy is known as life settlement. Since you're reading this, perhaps you are interested in discovering more about this option. We are here to help you make an informed decision through a process that is effective and help in any way possible.

Life insurance has been considered an asset that can be sold since 1911 (Grigsby vs. Russell). This means, no matter what type of life insurance policy you have, it can be sold. When funds review a life insurance policy to make an offer to purchase the two primary considerations are the policy and the insured's health.

By using our appraisal form, you can discover a rough estimate of what your policy may be worth. However, one of our experts can help with a personalized appraisal estimate taking into consideration all the facts.

Standard eligibility to sell a policy includes:

  • Age 65+
  • Face amount of $100k+
  • Change in health since obtaining the policy

There are exceptions to these standards. For example, someone younger with a Whole Life policy or severe health conditions may still qualify. Certain health conditions can increase offers significantly, which is where a personalized appraisal estimate can give you a clear idea of how well you qualify.

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How the Appraisal Value of Your Policy Is Obtained

As you consider the option of selling a life insurance policy, it is important to understand how buyers appraise policies. Life settlement is a developed market and appraisal values are higher than ever before. Similar to when you purchased the policy there is an underwriting process that determines appraisal value.

Typically, you can expect to receive between 10% to 40% of the policy benefit amount. Depending on your unique qualifications, the amount received can be much higher.

Some examples of policy appraisals:







Policy Type

Term Life

Universal Life

Health Concerns

Major health conditions

Moderate health conditions

Policy Benefit



Appraised Value



Some factors considered the most when determining value:

  • Future policy premiums
  • Policy benefit amount
  • Current insured health
  • Insurance carrier ratings

What type of offer can you expect depending on your relative health?

Filling out our basic appraisal calculator will provide you with a rough value estimate. Keep in mind that depending on your unique policy and health, your actual appraisal value may be much more.

Times You Should Keep Your Life Insurance Policy

There are situations when it is better for you not to sell your life insurance policy. If the premium payments are not a burden and you still have need for insurance, there is often more value in keeping the policy.

Many times, the need for life insurance decreases over time and often we can help in the sale of only part of the policy benefit. This allows you to keep the portion still needed and sell the remaining amount.

In other cases, a policy cannot be sold even if there is a desire to do so.







Policy Type

Universal Life

Whole Life

Health Concerns

Good health

Major health conditions

Policy Benefit



Appraised Value

Does not qualify


Has your need for life insurance changed? Don't let your policy lapse!

  • Complete the appraisal calculator
  • Receive an instant online appraisal

Is it Possible To Sell a Term Life Policy?

Level term policies are fantastic at providing valuable coverage for a set number of years. Term policies often hold a significant amount of value if the policy is still convertible. This is determined by the insurance carrier but is typically before the end of the term period up to a certain age (70 or 75 usually). Alternatively, almost all term policies are convertible for the first 5 policy years no matter the age.

Conversion premiums are higher than term premiums, sometimes significantly higher. That is ok!

We are here to assist in the quick evaluation of your policy to determine if it can be sold.

Too Many Miss Out on Life Settlement

Out of 500,000 life insurance policies that could be sold each year, less than 8% are. Don't be one of the many who lose out on often significant cash payouts if you are considering cancelling, not converting (a term), surrendering a life insurance policy, or you simply need funds now.

Why Most People Sell Their Policies

Over time, there are many situations that arise that may make selling a life insurance policy beneficial. Some of the most common situations we encounter are:

  • Required premiums have increased
  • Premiums could be better spent elsewhere
  • Funds are needed immediately for a specific reason
  • Business policy no longer needed
  • Need for life insurance has decreased
  • Beneficiary pre-deceases the insured
  • Term policy is near the end

Life Settlement Offer Types

There are different types of offers including cash, retained benefit, and hybrid. In no case can an offer be for less than the existing cash surrender value in a policy.

If any of these offer types are of particular interest, please let us know.

Cash Offer

A cash offer is a lump sum of cash in exchange for the policy. This is the most common type of offer.

Retained Benefit Offer

A retained benefit offer allows you to designate an irrevocable beneficiary for a portion of the policy benefit. You no longer are required to pay premiums but maintain a benefit. These types of offers will provide a higher amount since the benefit is realized at maturity.

Hybrid Offer

A hybrid offer combines a cash offer and a retained benefit offer.

How Long Does It Take?

There is an option for a phone interview which may provide an offer within 48 hours. The standard process can range anywhere from 1 - 2+ months to obtain a maximum offer. We can help facilitate whatever policy or personal timeline you are working with.

The Life Settlement Process

Understanding the steps involved in life settlement is another important topic. The company you work with should cover all the costs associated with the process. The company you work with is similar to a real-estate agent and will work with you to obtain the highest offer from across all buyers.

Step 1: Application

Like when you purchased the life insurance policy, there is a short application. This provides all the necessary information to request the correct documentation. Have the policy number, issue date and doctors' information available. There are three ways to complete the application:

1: Electronically through a document sent to your email. (Get Started)

2: Print, sign and then scan or fax back. (download application here)

3: We mail you a paper application with a return envelope.

Step 2: Requirement Gathering

Once an application is complete there are policy & medical requirements gathered. Depending on the insurance carrier or medical facility, additional authorization forms or 3-way calls may be necessary. If you have access to any of the requirements the process can speed up significantly.

Step 3: Out for Offer

Funds will underwrite your policy and provide feedback & offers. The company you work with will help negotiate on your behalf and can make counter offers and manage buyers. LS Hub has developed a sophisticated life settlement platform that manages all communication with extreme efficiency. Imagine juggling 20 contacts across 20 different funds and the value of our technology really shines.

Step 4: Acceptance

You are at no time obligated to sell your policy. If an offer does not make sense, we will recommend you keep your policy. There is no pressure to accept an offer but you will be able to accept an offer knowing you received the highest offer across all funds.

Step 5: Contracting

You will receive an offer acceptance & contract request form that clarifies the transaction and verifies information that will be used to prepare contracts. Along with signing the contracts, you will provide a copy of additional required documents such as a copy of your driver's license. The following parties must sign:

1) Policy Insured

2) Policy Owner (if not the insured)

3) Beneficiary (if not the estate of the insured)

4) Spouse (if applicable)

Step 6: Closing

Once the contracts and all contracting requirements have been satisfied, submitting the change of ownership & change of beneficiary forms to the insurance carrier is the final step. The closing company will track changes at the insurance carrier and once a written confirmation of changes is provided closing is complete.

Step 7: Funding

Within three (3) days of closing you will receive funds as you specified in the contracts. Depending on the state you live in there is usually a 15 - 30 day recission period. During this period, you can change your mind, return the funds, and get out of the transaction.

Key Points for Selling Your Term Policy

When selling a term life insurance policy, it is important to verify a few things with the insurance carrier. The company you work with can help obtain this information and run illustrations to show what premiums will be.

The key questions to verify with the insurance carrier are:

1) When is/was the conversion deadline

2) What is the approved rating class of the term policy

3) What are the available conversion products

Partial Term Conversion Sale

When a term policy is converted it can usually be split into multiple policies. In most cases an insurance agent will help determine the amount you need to keep, and the remaining amount is cancelled. Through a life settlement you can keep the desired amount and sell the remainder.

However, often the increased premiums are much higher policy owners do not want to convert anything.

Here is a comparison of a full vs. partial term conversion sale:


Partial Conversion Sale

Full Conversion Sale

Policy Benefit



Amount Kept



New Premium

$358 / month


Amount Sold



Offer Amount Recieved




We Are Here to Help

Selling a life insurance policy is an important decision but does not need to be difficult. The greatest impact on the appraisal value you receive will be the company you choose to work with. Life settlement is our area of expertise and we have a passion for getting the highest appraisal value for everyone who works with us.

Get started with a free appraisal estimate today and we will be here for you at whatever speed you want to move. We are here for the long-haul and if you decide to wait a few years before considering an appraisal we will be here ready and able to help.

Life Settlement Hub LLC, and/or a principal or agent of the company are authorized, licensed and/or registered to act as viatical/life settlement brokers in most states. Due to the ability of internet to enter States without intention, this web site or any other correspondence does not constitute a solicitation for business in any particular State.

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