Qualification Guide
Does Your Client Qualify for a Life Settlement?
Life settlements are not available to everyone — but they're available to far more clients than most advisors realize. Five key factors determine whether a policy qualifies for the secondary market.
The Five Criteria
What Buyers Look For
Institutional buyers evaluate each case on five primary factors. Understanding these criteria helps advisors quickly identify clients who are worth a deeper look.
Age
Typically 65 or Older
Most life settlement buyers require the insured to be at least 65 years old. However, age alone is not disqualifying — clients younger than 65 may still qualify if there have been significant changes in their health since the policy was issued.
Policy Face Value
$100,000 Minimum
The policy must have a face value of at least $100,000. Many transactions involve policies with face values of $500,000 to several million dollars. Higher face values generally attract more competitive offers from institutional buyers.
Policy Type
Universal Life, Whole Life, GUL, or Convertible Term
The most commonly settled policy types are Universal Life (including Indexed UL, Variable UL, and Guaranteed UL), Whole Life, and Convertible Term policies. Survivorship policies and group-converted policies may also qualify depending on the buyer.
Health Changes
Changes Since Issuance Improve Qualification
A life settlement is driven by life expectancy. If an insured's health has declined since the policy was issued — due to a chronic illness, major diagnosis, or other medical changes — the policy becomes significantly more attractive to institutional buyers. This is often the single most important qualification factor.
Premium Burden
Policies Becoming Too Expensive to Maintain
When premiums have escalated to the point where the client can no longer afford to maintain the policy — or no longer wants to — a life settlement can recover significant value before the policy lapses. This is especially common with older Universal Life policies with rising cost-of-insurance charges.
Policy Eligibility
Which Policy Types Qualify?
Not all life insurance policies are eligible for a life settlement. Here is a quick reference guide for the most common policy types.
Universal Life
Most commonly settled — IUL, VUL, and GUL also qualify
Guaranteed Universal Life (GUL)
Commonly settled — fixed premium structure is attractive to buyers
Whole Life
Strong candidate, especially older policies
Convertible Term
Must still be within the conversion window
Survivorship / Second-to-Die
Case-by-case — buyer dependent
Group Life (Converted)
Eligible if converted to individual policy
Non-Convertible Term
Generally not eligible
Accidental Death Only
Not eligible
* Eligibility is always case-specific. When in doubt, submit for a complimentary review. Amrita Financial will assess each case at no cost or obligation.
Not Sure If Your Client Qualifies?
The fastest way to find out is a confidential, no-obligation review. Amrita Financial will assess the case — at no cost — and let you know whether a secondary market exists for the policy.
Common Questions
Qualification FAQs
Advisors ask these questions constantly. Here are clear, direct answers.
My client is 60 years old. Can they still qualify?
Yes — in some cases. While most buyers prefer insureds who are 65+, a 60-year-old with significant health changes since policy issuance (such as a cancer diagnosis or serious chronic condition) may still qualify for a settlement. The best approach is to submit the case for a confidential, no-obligation review. Amrita Financial can quickly determine if a buyer market exists.
Does the policy type matter more than the age or health of the insured?
All three factors matter, but they interact. A Universal Life policy on a 75-year-old with declining health is an ideal candidate. A healthy 55-year-old with a term policy that can't be converted is unlikely to qualify. The sweet spot is a permanent policy (or convertible term) on an older insured whose health has declined since the policy was issued.
What if my client's premium burden is the main issue — not health?
Premium burden alone can be a qualifying factor, especially for Universal Life policies with escalating cost-of-insurance charges. Buyers understand that an insured willing to lapse a policy is an insured who might sell — and they price accordingly. If your client is about to lapse a policy, a settlement review should happen immediately.
Can an irrevocable life insurance trust (ILIT) sell a policy?
Yes. An ILIT-owned policy can be settled, though the trust document and trustee authorization requirements add a layer of complexity. Amrita Financial has extensive experience working with estate attorneys on ILIT-owned settlements and can guide advisors through the process.
How quickly can we find out if a client qualifies?
Very quickly. Amrita Financial can provide a preliminary qualification assessment within 24–48 hours of receiving basic case information (insured age, health status summary, policy face value, and policy type). A full appraisal with indicative offers typically takes 2–4 weeks.
Will going through a qualification review affect the client's insurability?
No. The qualification review process is confidential and does not involve any new underwriting that would appear on MIB (Medical Information Bureau) records. It is entirely independent of any future insurance applications.
What if my client owns multiple policies?
Each policy is evaluated independently. It is entirely possible that one policy qualifies while another does not. Amrita Financial will review each policy on its own merits and provide separate appraisals where applicable.
The Only Way to Know for Sure Is to Ask
Qualification can be confirmed quickly, confidentially, and at no cost. If a market exists for your client's policy, Amrita Financial will find it — and negotiate the best possible offer on their behalf.
All case reviews are confidential and carry no obligation. Amrita Financial does not market directly to clients — all communications go through the referring advisor.