How to Sell Life Insurance: A Step‑by‑Step Complete 2025 Guide
Selling your life insurance policy can be a smart financial move — especially if your coverage no longer fits your needs, or if you’re looking to unlock cash that’s tied up in premiums you no longer want to pay. Through a process known as a life settlement, policyholders can sell their life insurance to licensed buyers for a lump-sum payment, often far exceeding the policy’s surrender value.
In this step-by-step guide, we’ll walk you through exactly how to sell your life insurance policy, from determining eligibility to comparing offers and completing the sale. You’ll learn what to expect at each stage, how to avoid common pitfalls, and how working with a licensed life settlement broker like Summit Life Settlements can help you secure the highest possible payout for your policy.
Whether you’re planning for retirement, reducing expenses, or simply ready to make the most of your life insurance asset — this guide gives you the clarity and confidence to move forward.
Why People Sell Life Insurance Policies
Life changes. What was once essential protection for a young family or business can become an unnecessary financial burden later in life. Common reasons people choose to sell life insurance policies include:
- Rising premium costs
- Changes in estate planning
- The insured outliving the need for coverage
- Business ownership transitions
- Unexpected health expenses
- A desire to turn an unused policy into retirement income
Regardless of the reason, Summit Life Settlements offers a structured and ethical pathway to convert policies into cash.
Step-by-Step: How to Sell Life Insurance
- Determine Eligibility
Not all policies qualify for a sale, but many do — especially if the policyholder is over age 65, the policy has a face value of at least $100,000, and there’s been a decline in health. - Submit Your Policy for Review
Start by sending us basic policy information. Our specialists will review your case at no cost or obligation. - Convert Your Term Policy (If Applicable)
We guide you through converting your convertible term policy to permanent life, required for selling. - Appraisal & Underwriting
We evaluate your policy and health profile using market-based data to determine fair value. - Marketplace Bidding
Your policy is presented to multiple institutional buyers who place competitive bids. - Review Offers and Choose What’s Right for You
We help you compare offers and select the one that best fits your financial goals. - Complete the Sale & Receive Payment
Once you select an offer, we handle the paperwork. You receive payment — often within days.
What Kind of Policies Can Be Sold?
The most commonly sold policies include:
- Universal Life
- Whole Life
- Convertible Term Life
- Variable Life (under certain conditions)
Note: We do not handle employer-sponsored group life insurance or non-convertible term policies that have expired.
Real-Life Scenario: From Policy to Payment
Maria, 72, has a $500,000 universal life policy she purchased two decades ago. Her children are now financially secure, and the premiums are rising. Rather than let it lapse, she contacts Summit Life Settlements.
After a free review, her policy is listed on the marketplace. Within two weeks, she receives four offers and accepts one for $85,000. The entire process takes five weeks. Maria no longer needs to pay premiums and gains access to cash she can use now.
Why Summit Life Settlements?
This decision is too important to leave in the hands of just anyone. At Summit Life Settlements, our team brings years of experience, transparent practices, and a client-first approach to every case.
- We focus only on you — no middlemen, no hidden agendas.
- We educate first, so you’re never pressured into a decision.
- We bring licensed institutional buyers directly to you.
You worked hard for your policy. If it no longer fits your life, let us help you navigate the life settlement market to turn it into something that does.
Frequently Asked Questions
1. Can I really sell my life insurance policy?
Yes. Through a process called a life settlement, you can legally sell your life insurance policy to a licensed third-party buyer in exchange for a lump-sum payment that’s typically much higher than the surrender value. Once sold, the buyer takes over premium payments and receives the death benefit when the insured passes away.
2. Who qualifies to sell a life insurance policy?
Most people who qualify are age 65 or older, but younger individuals with significant health changes may also be eligible. Policies must generally have a face value of $100,000 or more and be either universal life, whole life, or convertible term life.
3. What types of policies can be sold?
You can sell most permanent life insurance policies, including universal life, whole life, variable universal life, and survivorship policies. Term life insurance may also qualify if it’s convertible to a permanent policy.
4. How much can I get for selling my policy?
The payout depends on factors like your age, health, premium costs, policy type, and face value. On average, policyholders receive 4 to 8 times more than the cash surrender value — and sometimes much higher, depending on demand.
5. How long does the life settlement process take?
The process typically takes 4 to 8 weeks. This includes gathering policy details, medical records, and underwriting before the broker presents your case to potential buyers for competitive bidding.
6. Is selling my life insurance taxable?
In many cases, part of your settlement may be taxable. The amount depends on how much you’ve paid in premiums and the total payout received. Summit Life Settlements can connect you with tax professionals for personalized guidance.
7. What happens after I sell my policy?
Once you complete the sale, the buyer becomes the new policy owner and is responsible for all future premium payments. You’ll receive an immediate lump-sum payment and have no further obligations related to the policy.
8. How is selling different from surrendering my policy?
When you surrender your policy to the insurance company, you typically receive only the cash surrender value. Selling your policy through a life settlement involves competitive offers from multiple buyers, often resulting in a significantly higher payout.
9. Do I need a broker to sell my policy?
While it’s possible to sell directly to a buyer, working with a licensed life settlement broker like Summit Life Settlements ensures your policy is shopped to multiple institutional buyers — maximizing your return and protecting your interests throughout the process.
10. Are there any fees or upfront costs?
No. Summit Life Settlements charges no upfront fees. Our brokerage fee (typically 15–20%, compared to the industry standard of 30%) is only paid after your policy successfully sells, ensuring our interests align with yours.
11. Will my beneficiaries lose the death benefit?
Yes. Once you sell the policy, the buyer becomes the new beneficiary. However, in exchange, you receive a lump-sum payment now, which you can use for retirement, healthcare, debt reduction, or any financial goal.
12. Is selling my life insurance policy confidential?
Absolutely. The life settlement process is strictly confidential. Your personal and medical information is only shared with licensed, approved buyers during the underwriting process.
13. What if I change my mind after starting the process?
There is no obligation to sell your policy at any point before signing the final documents. You can walk away from the process if the offers don’t meet your expectations.
14. How can Summit Life Settlements help me sell my policy?
Summit Life Settlements acts as your dedicated advocate and broker, representing your best interests. We handle all paperwork, coordinate with carriers and buyers, and run a competitive bidding process to ensure you get the highest possible payout for your life insurance policy.
