How Do I Sell My Life Insurance Policy? How It Works, Who Qualifies & What to Expect in 2025
Introduction
If you’re wondering, “Can I sell my life insurance policy?” — the answer is yes. In fact, more Americans are turning to life settlements to unlock the hidden value in their life insurance policies. Instead of surrendering your policy for a low payout, you can sell your insurance policy for a lump sum that’s often much higher than the surrender value.
This blog breaks down everything you need to know about how to sell your life insurance policy, who qualifies, how much you can expect, and how to get the best deal in 2025.
Can I Sell My Life Insurance Policy?
Yes — under most state laws, you have the legal right to sell your life insurance policy to a third-party buyer. This process is called a life settlement (or a viatical settlement if you’re terminally ill).
You don’t have to wait for your policy to lapse or cancel it for pennies. You can sell it for real cash while you’re alive — and use the money however you like.
Why Sell My Life Insurance Policy?
There are many valid reasons to sell your life insurance policy, including:
- Premiums are unaffordable or increasing
- Coverage is no longer needed for dependents
- Immediate cash is needed for medical bills or retirement
- Surrender value is too low, but the policy still has value
- You’re over 65 with a universal, whole, or convertible term policy
Who Qualifies to Sell a Life Insurance Policy?
You may be eligible to sell your insurance policy if:
- You’re generally 65 or older, or diagnosed with a serious health condition
- Your policy has a death benefit of $100,000 or more
- The policy has been active for at least 2 years (past contestability period)
- The policy is whole life, universal life, or convertible term
Some younger individuals may qualify, depending on health or policy type.
How Much Can I Sell My Insurance Policy For?
How Much Can I Sell My Insurance Policy For?
The amount you can sell your life insurance policy for depends on several factors, including your age, health, the type of policy you own, and the ongoing cost of premiums. Unlike a cash surrender value—which is often just a fraction of what you’ve paid in—life settlements typically provide a payout that is 10% to 40% of the policy’s face value.
For example:
| Policy Face Value | Estimated Payout Range |
| $100,000 | $15,000 – $30,000 |
| $250,000 | $40,000 – $85,000 |
| $500,000+ | $75,000 – $150,000+ |
Larger policies often generate even higher settlements.
Every case is unique. Buyers evaluate policies based on the insured’s life expectancy, the cost of keeping the policy in force, and the size of the death benefit. This is why working with a broker like Summit Life Settlements can make such a big difference—we bring your policy to a competitive marketplace where licensed buyers bid against each other, ensuring you get the highest possible offer.
Bottom line: While exact numbers vary, most policyholders are surprised to learn that selling a policy can generate a significant cash payout—often many times higher than surrendering or lapsing the policy.
Actual amounts depend on your age, health, premiums, and policy details. But in most cases, life settlements offer 4–8x more than cash surrender value.
Step-by-Step: How to Sell My Life Insurance Policy
- Submit Policy Info
Provide basic details — carrier, death benefit, premiums, type. - Get Offers from Buyers
Licensed life settlement providers will review and make cash offers. - Review and Compare Offers
Choose the offer with the best payout and terms. - Sign Legal Transfer Documents
Transfer ownership to the buyer — they take over premiums. - Get Paid
Receive a lump-sum cash payment within 4–6 weeks.
Benefits of Selling My Life Insurance
- ✅ Large cash payout without waiting for death benefit
- ✅ No more premium payments
- ✅ Use funds however you need — healthcare, debt, retirement
- ✅ Frees up financial flexibility
Risks and What to Watch Out For
- ❌ You lose the death benefit (goes to buyer)
- ❌ You may be taxed on some gains
- ❌ Privacy: buyer may request periodic health updates
- ❌ Work only with licensed, transparent companies
Real Examples of Life Settlement Payouts
- William, 72 – Chicago
After retiring, William realized his $300,000 life insurance policy was no longer needed. The premiums were becoming a burden, and his children were financially independent. Instead of surrendering the policy for a small payout, he sold it for $95,000 in cash. William used the funds to supplement his retirement income and enjoy more financial peace of mind. - Margaret, 67 – Florida
Margaret owned a $250,000 policy she had kept for years, but with rising medical expenses, she needed extra funds. By selling her policy through a life settlement, she received $62,000 in cash—money that helped cover treatments and provided her with immediate financial relief. - James, 80 – Texas
James held a $500,000 life insurance policy but found the premiums increasingly difficult to manage. Rather than letting it lapse, he chose to sell it for $145,000 in cash. The proceeds allowed him to cover long-term care costs and gave him more flexibility in managing his finances during retirement.
How to Maximize Your Life Settlement Value with a Broker
When it comes to selling a life insurance policy, the difference between working directly with a single buyer versus using a broker can be substantial. A broker represents you, the policyholder, not the buyer. That means their role is to shop your policy to multiple licensed buyers in a competitive marketplace, driving the offers higher and ensuring you receive the maximum possible value.
Without a broker, you may only receive one offer, leaving thousands of dollars on the table. With a broker, your policy is placed in front of many institutional buyers who bid against each other, often resulting in offers that are 4–10 times higher than the surrender value.
Why Choose Summit Life Settlements as Your Broker?
At Summit Life Settlements, we are committed to putting clients first. Here’s what sets us apart:
Unmatched Market Access: We connect your policy with a wide network of qualified, licensed buyers across the country, creating a true competitive bidding process.
Transparency and Compliance: Every step is handled with full disclosure and in strict adherence to state regulations, so you and your advisor can feel confident the process is safe and fair.
Proven Track Record: Our team has helped policyholders secure settlement offers far above what they would have received by surrendering or lapsing a policy.
Advisor Partnerships: We regularly work alongside financial advisors, insurance agents, and fiduciaries to ensure clients get the best outcome while professionals benefit from additional revenue opportunities.
Client-Centered Approach: Unlike direct buyers, we are your advocate. Our sole focus is maximizing your policy’s value and guiding you through a smooth, stress-free process.
With Summit as your broker, you’re not just selling a life insurance policy—you’re unlocking its true market value with an experienced partner who has your best interests at heart.
Frequently Asked Questions
Q1: Can I sell my life insurance policy if I’m under 65?
Yes. While most policyholders who sell their life insurance are over 65, younger individuals may also qualify—especially if they have significant health conditions or hold a large policy (generally $100,000 or more). Each case is evaluated individually, so age alone does not determine eligibility.
Q2: Is the money I receive taxable?
In part. A portion of the settlement may be subject to income or capital gains tax. The tax treatment depends on factors such as how much you’ve paid in premiums and the total payout you receive. Because tax laws vary by state and individual circumstances, it’s best to consult with your tax advisor to understand how a settlement would impact your situation.
Q3: How long does the process take?
On average, the life settlement process takes about 4–6 weeks from application to payout. This timeline includes collecting policy and medical information, receiving offers from buyers, and completing the closing paperwork. More complex cases can take a little longer, but Summit works to streamline the process as much as possible.
Q4: Do I have to pay any fees?
Not directly. If you work with Summit Life Settlements as your broker, there are no upfront costs. We are compensated only if a settlement closes, and our commission comes out of the buyer’s payment, not your pocket. This ensures our incentives are aligned with getting you the highest possible offer.
Q5: What types of policies qualify for a life settlement?
Most commonly, universal life, whole life, and convertible term policies qualify. Even group or employer-provided policies may be eligible under certain circumstances. The key factors are the policy’s face value, premium costs, and the insured’s age and health.
Q6: How much cash can I expect to receive?
Every case is different, but policyholders typically receive anywhere from 10% to 40% of the policy’s face value. For example, a $500,000 policy could sell for $50,000–$200,000 depending on the details. The payout is almost always significantly higher than the surrender value.
Q7: Will my family lose the death benefit if I sell my policy?
Yes. Once you sell a life insurance policy, the buyer becomes the new policy owner and receives the death benefit when the insured passes away. However, in some cases you may be able to retain a portion of the death benefit while still receiving cash upfront.
Q8: Is selling my life insurance safe?
Yes. Life settlements are regulated in most states to protect policyholders. Working with a licensed brokerage like Summit ensures that the process is transparent, compliant, and designed with your best interests in mind.
