How to Sell Life Insurance: Step-by-Step Guide to Unlocking Value from Your Policy
If you no longer need your life insurance coverage—or the premiums have become unaffordable—you may be sitting on an untapped financial resource. Selling life insurance through a life settlement can help you turn your policy into a valuable lump sum payout.
At Summit Life Settlements, we specialize in guiding people through the process of how to sell life insurance, from initial policy evaluation to receiving your cash. Whether you’re downsizing, planning for retirement, or need help with medical bills, selling your life insurance policy might be one of the smartest financial moves available to you.
What Does It Mean to Sell Life Insurance?
Selling life insurance refers to a financial transaction known as a life settlement, in which the policyholder transfers ownership of their life insurance policy to a third-party buyer. In exchange, the seller receives a cash payout—often significantly higher than the policy’s surrender value.
Once sold, the buyer becomes responsible for paying the premiums and receives the death benefit upon the passing of the insured.
If you’re asking “Can I sell my insurance policy?”—the answer is yes, under the right conditions. Summit Life Settlements helps you access this market while ensuring you’re informed, protected, and positioned for maximum value.
Why Consider Selling Life Insurance?
There are many reasons people explore selling a life insurance policy:
- The policy is no longer needed due to financial or personal changes
- Premium payments are too expensive to maintain
- You need immediate access to cash for medical care, debt, or retirement
- You’re looking to reallocate resources more effectively in later life
Whatever your reason, a life settlement can provide a powerful, tax-advantaged liquidity solution.
Who Qualifies to Sell a Life Insurance Policy?
While every case is unique, general qualifications for a life settlement include:
- Age: Typically 65 or older (younger if you have certain health conditions)
- Policy Face Value: At least $100,000
- Policy Type: Universal, whole life, or convertible term
- Health Status: Those with declining health often receive higher offers
Summit Life Settlements provides a free evaluation to help you determine if your policy qualifies, and how much it might be worth.
How to Sell Life Insurance in 5 Simple Steps
- Policy Evaluation: We review your policy’s details—type, value, premiums, and convertibility. We also consider your age and health.
- Health Review: Buyers assess life expectancy to determine value. We help gather your medical records confidentially.
- Market Your Policy: Your policy is submitted to multiple licensed buyers who compete to offer the best value.
- Compare Offers: We present all offers clearly so you can choose the one that aligns with your goals.
- Close the Deal: Once you accept an offer, closing usually takes 4–6 weeks. You receive a lump sum, and the buyer takes over the policy.
Selling Life Insurance vs. Surrendering or Letting It Lapse
| Option | Typical Outcome |
|---|---|
| Letting it Lapse | No payout—lose the entire value |
| Surrendering | Small cash value (if any) |
| Selling | Significant lump sum payout (10–40% of face value) |
Selling your life insurance policy is the only option that lets you potentially receive much more than your surrender value—without continuing to pay premiums.
Real Client Story: Selling Life Insurance Made Simple
John, age 74, had a $300,000 universal life insurance policy. Premiums were rising, and he didn’t think he needed it anymore. His insurance company offered him $8,700 in surrender value.
Instead, he reached out to Summit Life Settlements. After reviewing his situation and submitting his policy to multiple buyers, John sold his policy for $58,000—over six times more than the surrender offer.
This allowed him to pay down debt and fund his grandchildren’s education—all with money he didn’t know he could access.
Why Choose Summit Life Settlements?
When you’re considering selling your life insurance policy, it’s essential to work with a partner who puts your best interests first—not the buyer’s.
At Summit Life Settlements, we’re committed to making the process transparent, secure, and rewarding for every client.
Here’s what sets us apart:
Free, no-obligation policy evaluations — get a clear picture of your options before making any decisions.
Access to licensed, reputable institutional buyers — we work only with trusted, vetted funding sources.
Competitive marketplace bidding — multiple offers mean stronger negotiating power and higher payouts.
Privacy and professionalism — we manage every step of the process confidentially and efficiently.
No hidden fees—ever — you pay nothing out of pocket, and our compensation is disclosed upfront at closing.
We’re more than just a middleman. We’re your advocate, dedicated to helping you understand the life settlement market in order to unlock the maximum value from your life insurance policy with confidence and peace of mind.
Final Thoughts
If you’ve ever asked how to sell life insurance, now you know it’s not only possible—it can be a smart, profitable move for the right policyholder.
Whether you’re downsizing your coverage, managing health expenses, or planning for retirement, selling a life insurance policy through a life settlement may be one of the most valuable financial decisions you can make.
Summit Life Settlements is here to guide you at every step—with honesty, clarity, and a track record of helping clients just like you.
FAQs: How to Sell Your Life Insurance Policy
1. Can I really sell my life insurance policy?
Yes. Life insurance is considered your personal property, which means you have the legal right to sell it to a licensed buyer for cash. This process—known as a life settlement—was made legal by the U.S. Supreme Court in Grigsby v. Russell (1911) and is now regulated in most states to protect consumers.
2. Who qualifies to sell their life insurance policy?
Most people qualify if they meet a few key criteria:
The insured is typically 65 years or older, or younger with significant health changes
The policy has a death benefit of at least $100,000
The policy type is universal life, whole life, or convertible term
A licensed broker like Summit Life Settlements can quickly assess your eligibility at no cost.
3. How does selling a life insurance policy work?
The process involves five main steps:
Initial evaluation – Your broker reviews your policy and health profile.
Gathering records – Medical and policy documents are collected.
Marketplace bidding – Your policy is presented to multiple licensed buyers.
Offer review – You receive and choose the best offer.
Closing and payment – Ownership transfers, and you receive a lump-sum payout.
Your broker manages every step, ensuring a smooth and compliant transaction.
4. How much money can I get when I sell my policy?
The amount you receive depends on:
Your age and health
The type, size, and premiums of your policy
Market demand among institutional buyers
On average, policyholders receive four to eight times more than their policy’s cash surrender value—though every case is unique.
5. What types of life insurance policies can be sold?
The most common policy types eligible for sale include:
Universal life
Whole life
Convertible term life (must be convertible to a permanent policy)
Group policies (in some cases, if portable)
If you’re unsure whether your policy qualifies, a free evaluation can determine that quickly.
6. Who buys life insurance policies?
Policies are purchased by licensed institutional investors, such as hedge funds, pension groups, and reinsurance companies. These buyers—called life settlement providers—assume ownership, pay future premiums, and collect the death benefit later.
7. Why would someone sell their policy?
Policyholders choose to sell for many reasons, including:
Premiums are no longer affordable
The policy is no longer needed for estate or income protection
They want to fund long-term care, retirement, or medical expenses
The policy is about to lapse or be surrendered for little value
Selling allows you to unlock value that would otherwise go unused.
8. Is selling a life insurance policy safe?
Yes, when done through licensed brokers and providers. The life settlement market is regulated by state insurance departments, requiring strict disclosures, transparent offers, and consumer protections. Working with a reputable broker like Summit Life Settlements ensures your sale is handled safely and professionally.
9. How long does the process take?
Typically, 6 to 12 weeks. The timeline depends on how quickly your insurance carrier and medical providers release records and how long it takes buyers to underwrite and submit offers.
10. Will I owe taxes on the money I receive?
Possibly. Life settlement proceeds are often divided into portions that may be tax-free (return of premium), ordinary income, or capital gains. The exact tax treatment varies by case, so it’s best to consult a qualified tax advisor before finalizing a sale.
11. Do I have to pay any fees upfront?
No. There should never be any upfront fees to get a policy evaluation or market your policy. Brokers like Summit Life Settlements are only compensated if your policy sells, and the commission is clearly disclosed and paid from the sale proceeds at closing.
12. Can I sell a term life policy?
Yes, if your term policy is convertible to a permanent policy. Brokers often help policyholders convert before selling so the coverage retains value instead of expiring without benefit.
13. What happens after I sell my policy?
Once the sale closes:
You receive your cash payment
The buyer becomes the new owner and beneficiary
The buyer takes over all future premium payments
You have no further obligations to the policy
14. Will the buyer contact me after the sale?
Buyers typically request periodic health updates through a professional tracking service. These updates are routine, confidential, and managed securely—there’s no direct or invasive contact.
15. How do I start the process?
Getting started is simple. Contact Summit Life Settlements for a free, no-obligation policy review. We’ll evaluate your eligibility, estimate your policy’s potential value, and guide you through the process to ensure you receive the maximum possible payout safely and efficiently.
