What Is Term Life Insurance?
Term life insurance provides coverage for a specific period—often 10, 20, or 30 years. It’s designed to protect your family or cover debts during your working years. If you pass away during the term, your beneficiaries receive the death benefit.
But what happens if you outlive the policy? In most cases, it simply expires with no payout. That’s why many policyholders ask: Can you cash out term life insurance before death?
Can You Cash Out a Term Life Insurance Policy?
Unlike whole life or universal life, term life insurance does not build cash value. This means you can’t borrow against it, withdraw from it, or surrender it for a built-up amount.
However, if your term policy includes a conversion option, you may still have a valuable opportunity.
Understanding Term Conversion: Your Key to Cashing Out
A conversion rider allows you to change your term life insurance into a permanent policy—such as whole or universal life—without medical underwriting. This is typically available for a limited time (e.g., the first 10–15 years of a 20-year term policy).
Once converted, the permanent policy can be sold on the life settlement market—a secondary market where investors purchase policies for more than the surrender value.
This is how many policyholders successfully cash out term life insurance—even though it technically has no built-in cash value.
How a Term Life Policy Becomes a Sellable Asset
- Review Your Policy: Check if your term policy is convertible and still within the conversion window. Summit Life Settlements offers free policy reviews to help you confirm this.
- Convert the Policy: If eligible, we guide you through converting the term policy to permanent life insurance. No new medical exams are needed.
- Evaluate the Value: Once converted, our team performs a policy and medical evaluation to determine how much your policy may be worth on the secondary market.
- List and Receive Offers: We present your converted policy to multiple licensed institutional buyers. You receive offers—often significantly higher than what you’d get by letting the policy lapse.
- Accept and Get Paid: If you accept an offer, the buyer takes over premium payments, and you receive a lump-sum payout—usually within 4–6 weeks.
Why Consider Cashing Out a Term Policy?
Many term policies are left to expire with no benefit to the policyholder. But if you qualify for conversion, you could recover tens of thousands of dollars or more—money you can use now.
Selling your policy may be a smart move if:
- Your financial responsibilities have changed
- You no longer need life insurance coverage
- Premiums are becoming unaffordable
- You’d prefer to access value now for healthcare, retirement, or personal goals
Summit Life Settlements helps you evaluate all these factors and make a clear, informed decision.
Real Example: Sarah’s Policy Conversion
Sarah, 69, had a 20-year term policy set to expire in 14 months. She no longer needed the coverage and considered letting it lapse. Her advisor suggested checking if it could be converted.
Summit reviewed her policy and confirmed it was still convertible. After conversion and market listing, she received four offers. Sarah accepted a life settlement offer of $48,000—turning her expiring policy into a valuable cash resource for her retirement.
Can You Cash In a Term Life Insurance Policy If You’re Healthy?
Yes—though your payout may be higher if you have health conditions that reduce life expectancy. Still, many healthy seniors over 65 can qualify for life settlements, especially with larger policies ($100,000+).
The key is to act before your policy expires or the conversion period ends.
How Long Does It Take to Cash Out a Term Life Insurance Policy?
On average, the life settlement process takes 4 to 6 weeks, depending on how quickly documents and medical records are gathered. Summit handles the heavy lifting and keeps you informed at every step.
Why Work with Summit Life Settlements?
When it comes to cashing out term life insurance, few companies offer the transparency and policyholder-first approach that Summit does.
Here’s what sets us apart:
- Free, no-obligation policy reviews
- Support for policy conversion
- Access to multiple licensed buyers
- Clear guidance and communication
- No upfront fees—ever
We focus on helping seniors and policyholders get real value from policies they no longer need.
Final Thoughts
Even if your term policy doesn’t build cash value, it may still hold hidden worth—especially if it includes a conversion option. With the right timing and expert support, you could convert and cash out term life insurance before it expires, turning it into a powerful financial resource.
Summit Life Settlements is here to help you evaluate, convert, and sell your policy for the highest possible return—with clarity and compassion.
👉 Start with your free policy review today
Frequently Asked Questions
Yes—if the policy is convertible. You can convert it to permanent insurance, then sell it for a lump sum.
Possibly. If you’re still within the conversion window, Summit can help you act quickly before it expires.
It depends on your age, health, premium costs, and policy size. Many sellers receive offers between 10–40% of the policy’s face value.
Some or all of the life settlement proceeds may be taxable. We recommend consulting a tax advisor for your situation.
No. Once the policy is sold, the buyer takes over all premium payments.
