You’re not the same person you were when you bought that life insurance policy. Maybe your kids are grown, your mortgage is paid off, or your financial goals have changed. Whatever the reason, you’re asking the question:
Can I sell my life insurance policy?
Spoiler alert: Yes, you can. And depending on your situation, it might be a smart move.
Let’s break down what it means to sell your life insurance policy (a.k.a. a life settlement), how it works, who qualifies, and what to watch out for. This guide is all about options—because your money moves should work for you.
Table of Contents
What Does It Mean to Sell a Life Insurance Policy?
Selling your life insurance policy is called a life settlement. It means you sell your existing policy to a third party (usually an investor or life settlement company) in exchange for a lump-sum cash payment. That buyer becomes the new owner, pays the premiums, and eventually collects the death benefit.
So instead of letting the policy lapse or surrendering it for minimal cash value, you could potentially receive more money through a life settlement.
Why Would Someone Want to Sell Their Life Insurance Policy?
Great question. There are many reasons someone might want to cash out:
- You no longer need the coverage. Your dependents are financially independent, or you’ve got other assets in place.
- You need access to cash. Whether it’s medical expenses, retirement income, or a business investment, your policy could help fund your next move.
- Premiums are too high. If keeping the policy feels like a burden, selling it may relieve that pressure.
- Your policy is about to lapse. Rather than letting it expire without a payout, you might still be able to get value from it.
Who Qualifies to Sell Their Life Insurance Policy?
Every life insurance policy and person is different, but here are general qualifications for a life settlement:
✅ You’re usually 65 or older (though younger people with certain health conditions may qualify).
✅ The policy has a face value of $100,000 or more.
✅ The policy is permanent (whole, universal, or variable) or convertible term.
✅ You’ve owned the policy for at least 2–5 years, depending on state laws.
How Much Can I Get If I Sell My Life Insurance Policy?
It depends on your:
- Age and health
- Type of policy
- Face value and cash value
- Premium amount
- Buyer interest
On average, life settlement payouts are typically 20%–30% of the policy’s face value, and often significantly more than the cash surrender value.
💡 Example: If you have a $250,000 policy, you might receive $50,000–$75,000 through a life settlement, instead of just $5,000–$10,000 if you surrendered it.
When Should You Sell Your Life Insurance Policy?
Let’s be real—selling your life insurance policy isn’t always the first move, but in the right moment, it can be a powerful money shift.
So, when should you consider it? If your policy no longer serves your current life stage, your premiums feel like a financial strain, or you need cash for medical care, debt, or retirement dreams—you may be in the sweet spot to sell your life insurance policy. It’s especially worth exploring if you’re over 65, your health has changed, or your beneficiaries no longer rely on the payout. Translation? If the policy is gathering dust and no longer aligns with your purpose or priorities, it might be time to cash it in and redirect that value toward what matters now.
What Are My Alternatives to Selling?
Before you sell your life insurance policy, consider other options:
- Surrender it: You cancel the policy and receive the cash surrender value (if any).
- Take a policy loan: Borrow against the policy’s cash value while keeping it active.
- Accelerated death benefit: If you’re terminally ill, you may access part of the death benefit early.
- Reduce the death benefit: This lowers premiums and keeps some coverage in place.
Each option has pros and cons. Talk to a trusted insurance advisor (hey, that’s me 👋🏼) before making a move.
Is Selling My Life Insurance Policy Safe?
It can be, but like anything financial, there are risks.
Here’s what to watch out for:
⚠️ Scams and lowball offers – Always work with a licensed life settlement provider or broker.
⚠️ Tax implications – Some or all of the money you receive may be taxable.
⚠️ Impact on benefits – A lump sum could affect eligibility for Medicaid or other assistance.
⚠️ Loss of death benefit – Once you sell, your loved ones won’t receive the payout.
Are you any closer to answering the question, can I sell my life insurance policy? If so, a comment! I want to know what has been the most helpful.
How Do I Start the Process of selling my life insurance policy?
- Review your policy: What type is it? How much is the face value? Are premiums current?
- Talk to a licensed advisor (that’s where I come in): I’ll help you determine if selling makes sense.
- Get quotes from life settlement companies or brokers for fair-market value.
- Compare offers and read the fine print.
- Close the deal and receive your lump sum (typically takes 4–8 weeks).
Want more information to help you answer the question can I sell my life insurance policy? Click here to read what Forbes has to say.
Final Word: You Have Options—Let’s Talk Strategy
Selling your life insurance policy can be a powerful way to unlock cash, fund retirement, or ease financial stress. But it’s not one-size-fits-all.
Whether you’re considering a life settlement, looking to restructure your coverage, or just want a second opinion—I’m here to help you make a confident, informed decision. And to ultimately help you answer the question, can I sell my life insurance policy?
Let’s explore what’s possible for your policy.
📝 Can i sell my life insurance policy? still not sure, let’s chat!
Click [here] to book a free consultation and see if together we can answer the question, can I sell my life insurance policy! I’m here to help you figure out if it is the right move for you.
