Selling Your Life Insurance Policy
Sell Your Life Insurance Policy
If you own a life insurance policy you no longer need or can no longer afford, you can sell it on the secondary market for a lump sum cash payment. This is called a life settlement, and it typically delivers 4 to 8 times more than the cash surrender value the insurance company would pay if you cancelled the policy.
Amrita Financial represents the seller, not the buyer. With 25+ years of experience and a network of 30 or more institutional buyers, we create competition for your policy that drives up the offer price. 98% of our business comes from advisor referrals because we deliver results with full transparency.
Why Sell Your Life Insurance Policy?
Most policyholders who surrender or lapse a life insurance policy never realize they could have sold it instead. The result is a significant financial loss. If any of the following situations apply, a life settlement may be the right decision.
Cash Surrender Is Too Low
The insurance company offers you a fraction of what the policy is worth on the secondary market. A life settlement typically delivers 4 to 8 times more than the cash surrender value. That difference can be tens or hundreds of thousands of dollars.
Premiums Have Become a Burden
Universal life policies with rising cost-of-insurance charges can become unaffordable over time. Instead of lapsing the policy and getting nothing, selling it recovers significant value. If you are about to lapse a policy, contact Amrita Financial immediately.
Coverage No Longer Needed
Children are grown. The mortgage is paid off. The business has been sold. The estate no longer needs liquidity. When the original purpose of the policy no longer applies, holding and paying premiums is an unnecessary cost.
Health Has Changed
If the insured's health has declined since the policy was issued, the policy becomes more valuable to institutional buyers. Health changes are one of the most significant drivers of settlement value. Even moderate changes can materially increase offers.
Funding Long-Term Care
Long-term care is expensive, and many people are underinsured for it. A life settlement can fund LTC insurance, in-home care, assisted living, or nursing home costs using an asset the client already owns.
Estate Planning Has Changed
Estate tax exemptions have shifted. ILITs that made sense years ago may no longer serve their original purpose. An irrevocable trust can sell a policy it no longer needs, distributing real value to beneficiaries instead of paying premiums indefinitely.
Cash Surrender vs. Life Settlement: What Is the Difference?
When you no longer want or need a life insurance policy, you have three basic options: let it lapse (get nothing), surrender it to the insurance company (get the cash surrender value), or sell it on the secondary market (get a life settlement). The difference between surrender and settlement can be enormous. For a detailed breakdown of how cash surrender value works, see our cash surrender value guide.
Cash Surrender
- -You contact the insurance company directly
- -You receive the cash surrender value stated in the policy
- -Typically a small fraction of the death benefit
- -No medical underwriting or buyer competition
- -The insurance company sets the price, take it or leave it
- -Transaction completes quickly, often within weeks
Life Settlement
- +You work with a broker who represents you
- +30+ institutional buyers compete for your policy
- +Typically 4 to 8 times the cash surrender value
- +Medical underwriting and life expectancy assessment
- +Competitive bidding drives up the offer price
- +Process takes 90 to 120 days, but the payout is far higher
Example: A 74-year-old with a $1,000,000 universal life policy received a cash surrender offer of $82,000 from the insurance company. Through a life settlement with Amrita Financial, the same policy sold for $310,000. That is a difference of $228,000 that would have been lost to surrender.
How to Sell Your Life Insurance Policy
The process of selling a life insurance policy follows a structured five-step workflow. For the complete step-by-step breakdown, see our process guide. Here is the summary:
Assess the Policy
Day 1Determine whether the policy qualifies for the secondary market. Key factors: insured age (typically 65+), face value ($100,000+), policy type (universal life, whole life, GUL, convertible term), and health changes since issuance. Use our calculator for a preliminary estimate.
Engage a Broker
Days 1 to 3Contact Amrita Financial to begin the process. We will review the policy details, explain the settlement process, answer your questions, and sign a representation agreement. There is no cost to you at this stage or any stage before closing.
Underwriting and Valuation
Weeks 2 to 6We order medical records and coordinate with the insurance carrier. Independent underwriters assess life expectancy. We prepare a professional case file and submit it to 30 or more institutional buyers to create competitive bidding.
Review and Negotiate Offers
Weeks 6 to 10Buyer offers come in. We analyze each one, negotiate against counteroffers, and present all qualified offers to you with full transparency and our recommendation. You make the final decision with complete information and zero pressure.
Close and Receive Payment
Weeks 10 to 14Once you accept an offer, closing documents are prepared and executed. Proceeds are typically disbursed within 2 to 4 weeks of signed closing. You receive a lump sum payment with no further obligations related to the policy.
Who Can Sell a Life Insurance Policy?
Not every policy can be sold, but far more policies qualify than most people realize. The basic criteria are straightforward. For a complete eligibility breakdown including policy types and health factors, see our qualification guide.
Age
Insured typically 65 or older. Younger insureds may qualify with significant health changes.
Face Value
Policy face value of $100,000 or more. Higher face values attract more competitive bidding.
Policy Type
Universal life, whole life, GUL, and convertible term qualify. Non-convertible term generally does not.
Health Changes
Health decline since policy issuance increases value. Terminal illness may qualify for viatical settlement rates.
Premium Status
Policy must be in force. If premiums are unaffordable, a settlement can recover value before lapse.
Ownership
Individuals, trusts, corporations, and partnerships can all sell policies they own.
Why Work With a Broker?
When you sell a life insurance policy, you have two choices: work with a direct buyer or work with a broker. The difference matters. A direct buyer represents their own investment fund. They will offer you a single price, which is their best (lowest) offer. A broker represents you. Amrita Financial submits your policy to 30 or more institutional buyers simultaneously, creating genuine competition that drives up the price. This is the fiduciary difference.
Direct Buyer
- ✗Represents the buyer, not you
- ✗Single offer, no competition
- ✗Their best offer is their lowest
- ✗No fiduciary duty to the seller
- ✗You are on your own
Amrita Financial (Broker)
- ✓Represents you, the seller
- ✓30+ buyers compete for your policy
- ✓Competition drives up the offer price
- ✓Fiduciary duty to maximize your payout
- ✓25+ years of experience, 98% advisor-referred
Frequently Asked Questions
Can I sell my life insurance policy?
Yes. If you own a life insurance policy with a face value of $100,000 or more and the insured is typically age 65 or older, you can sell the policy on the secondary market. The sale is called a life settlement. You receive a lump sum cash payment that is typically far more than the cash surrender value the insurance company would pay if you cancelled the policy. The buyer takes over premium payments and receives the death benefit when the insured passes away.
How much can I sell my life insurance policy for?
The amount depends on several factors including the face value of the policy, the age and health of the insured, the policy type, and current interest rates. On average, life settlement proceeds are 4 to 8 times higher than the cash surrender value, typically ranging from 10 to 40 percent of the policy face value. For terminally ill insureds (viatical settlements), proceeds can reach 50 to 80 percent of face value. Amrita Financial submits each case to 30 or more institutional buyers to ensure the highest possible offer.
What types of life insurance policies can be sold?
Universal life, whole life, guaranteed universal life (GUL), variable universal life, indexed universal life, and convertible term policies can generally be sold. Term policies must still be within their conversion window. Non-convertible term policies, accidental death only policies, and policies with face values below $100,000 typically cannot be sold. See our Who Qualifies page for a full eligibility breakdown.
Is selling a life insurance policy legal and regulated?
Yes. Life settlements are legal and regulated in the majority of U.S. states. State laws govern broker licensing, disclosure requirements, contestability periods, and consumer protections. Amrita Financial operates in full compliance with applicable state laws in every transaction. Paul W. Bowen is nationally licensed as a life settlement broker with 25+ years of experience.
How long does it take to sell a life insurance policy?
The typical timeline is 90 to 120 days from initial submission to payout. This includes policy evaluation, medical underwriting, buyer marketing, offer negotiation, and closing. Viatical settlements for terminally ill insureds can often be completed in 30 to 60 days on an expedited basis. Amrita Financial provides realistic timeline expectations at the start of every case.
Will selling my policy affect my taxes?
Life settlement proceeds are typically taxed in three layers: amounts up to the cost basis (total premiums paid) are generally tax-free, amounts above the cost basis up to the cash surrender value are taxed as ordinary income, and amounts above the cash surrender value are typically taxed as long-term capital gains. Viatical settlements for terminally ill insureds are generally tax-free under IRC Section 101(g). Always consult a qualified tax advisor for individual guidance.
What happens after I sell my policy?
After closing, the institutional buyer takes over ownership of the policy and assumes all future premium payments. The buyer becomes the new beneficiary and will receive the death benefit when the insured passes away. You have no further obligations related to the policy. The proceeds are yours to use however you choose, with no restrictions.
Should I use a broker or sell directly to a buyer?
Always use a broker. A direct buyer represents their own investment fund and will offer you a single price, which is their best (lowest) offer. A broker like Amrita Financial represents you, the seller. We submit your policy to 30 or more institutional buyers simultaneously, creating competition that drives up the offer price. Studies have shown that brokered transactions consistently yield higher payouts than direct sales. With 25+ years of experience and 98% of our business from advisor referrals, we have the relationships and expertise to maximize your payout.
Ready to Find Out What Your Policy Is Worth?
Get a free, confidential appraisal of your policy. No cost, no obligation. Find out whether a life settlement makes sense for you.
(888) 539-8885 | info@amritafinancial.com