Discover How to Use a Life Settlement to Fund Long-Term Care Without Draining Your Savings
As we age, the reality of needing long-term care becomes more likely. Whether it’s due to a chronic illness, cognitive decline, or simply the natural challenges of aging, long-term care services like assisted living, in-home support, or nursing facilities can become a necessity. Unfortunately, these services can cost tens of thousands of dollars annually, and many Americans are caught off guard by the price.
For seniors who own life insurance policies, there’s an often-overlooked solution that could provide immediate relief—a life settlement. Instead of lapsing or surrendering your policy for little or nothing, you can potentially cash out your life insurance policy through a life insurance settlement, providing a lump-sum payment to help pay for long-term care expenses and protect your savings.
What Is a Life Settlement?
A Life Settlement is a type of financial transaction that allows life insurance policyholders—typically seniors—to sell their existing life insurance policy to a licensed third-party investor for a lump-sum cash payment. This option gives individuals the ability to unlock the value of their policy while they’re still alive, rather than letting it lapse or surrendering it back to the insurance company for a minimal return.
Once the sale is completed, the buyer becomes the new legal owner and beneficiary of the policy. The investor then assumes all future premium payments and collects the full death benefit when the insured person passes away.
This solution is particularly appealing to those who no longer need their coverage, can no longer afford the premiums, or would benefit more from accessing their policy’s value now rather than leaving it in force.
How Much Can I Expect to Receive?
The cash payment received in a life settlement—known as the life insurance settlement value—is typically much higher than the policy’s cash surrender value, sometimes by three to four times as much. However, the payout is still less than the policy’s face value (the full death benefit).
For example:
A $500,000 policy might have a cash surrender value of $5,000–$10,000.
That same policy could potentially sell for $75,000–$150,000 or more in a life settlement, depending on age, health, and premium costs.
Why Consider a Life Settlement?
There are many reasons why someone may choose to pursue a life settlement. You might no longer need the coverage (e.g., your children are financially independent), the policy has become too expensive to maintain, or you need funds for retirement, medical bills, or long-term care expenses.
Whatever your reason, a Life Settlement can offer a smart and dignified exit strategy—one that can put tens or even hundreds of thousands of dollars back in your hands.
Why Consider a Life Settlement for Long-Term Care?
Long-term care costs are rising rapidly, and Medicare doesn’t cover most of them. Whether you need part-time in-home care, 24-hour skilled nursing, or help with daily activities in an assisted living facility, the expenses can quickly drain your savings or burden your family.
A life settlement offers an alternative way to fund these costs by turning a non-liquid asset—your life insurance policy—into a lump sum cash payment.
Here’s how this can help:
✅ Pay for professional caregivers or assisted living services
✅ Make home modifications for safer aging in place
✅ Cover medications, medical equipment, or therapy
✅ Offset the costs of a memory care or nursing facility
✅ Preserve your spouse’s or family’s financial stability
Instead of exhausting retirement accounts or relying solely on Medicaid, you can sell your life insurance policy for cash and stay in control of your long-term care decisions.
Who Is Eligible for a Life Settlement?
Not everyone qualifies for a Life Settlement, but many people are surprised to find that they do.
You may qualify if:
You are 65 or older, or younger with a serious health condition
Your policy is valued at $100,000 or more
You own a universal life, whole life, variable life, or convertible term policy
Even term policies may qualify if they are convertible to permanent insurance. Each case is evaluated individually, so it’s always worth speaking with a licensed broker for a free policy review.
How to Determine Life Settlement Payout?
The amount you receive from a life settlement depends on several factors:
Your age and life expectancy
The type and size of your policy
The cost of future premiums
Your current health and medical history
On average, sellers receive between 20% and 60% of their policy’s face value, which is usually several times higher than the policy’s cash surrender value.
Key Benefits of Using a Life Settlement to Fund Long-Term Care
Here’s why a life insurance settlement is one of the most flexible and powerful options available for covering long-term care needs:
✅ Access Immediate Cash
Turn your policy into liquid funds that can be used for any purpose—especially when you need care now, not years from now.
✅ Avoid Draining Retirement Assets
Preserve your IRA, 401(k), and savings accounts for other essential needs or for your spouse and family.
✅ No More Premium Payments
Once you sell, the buyer takes over paying the premiums—relieving you of future financial responsibility.
✅ Use the Funds How You Choose
You maintain control of how your settlement money is used: pay for care, eliminate debt, or set up a reserve for emergencies.
✅ No Upfront Fees
At Summit Life Settlements, there are no out-of-pocket costs. You only pay if you accept an offer—and we handle the process for you.
How Does the Process Work?
Initial Evaluation
You submit your policy details to a licensed broker like Summit Life Settlements.Underwriting & Life Expectancy Review
We collect medical records and obtain life expectancy reports to value your policy.Receive Offers
We shop your policy to a network of institutional buyers and present you with the top competing bids.Choose to Accept
If you accept an offer, contracts are signed, and funds are securely transferred to you—often within 30 to 60 days.Use the Cash Immediately
Once the transaction closes, you’re free to use the funds however you wish—often before long-term care becomes urgent.
Why Choose Summit Life Settlements?
At Summit Life Settlements, we’re not just a broker—as your trusted partner and advocate, we help you navigate the Life Settlement Market. We understand that selling your life insurance policy is a deeply personal and financially important decision. Whether you’re planning for long-term care, reducing expenses, or looking to unlock value from an underused asset, you deserve guidance that’s transparent, trustworthy, and always focused on your best interest.
That’s where Summit Life Marketplace makes a difference.
Unlike many traditional brokers who only work with one or two buyers, we’ve built a dedicated marketplace platform that connects you to a broad network of licensed institutional investors. This allows us to create a competitive bidding environment—which helps drive up your offer and ensures you never settle for less than what your policy is truly worth.
We work for you—not the buyer.
When you work with Summit, you get:
✅ Transparent, honest policy evaluations — so you always know what your policy is worth and why.
✅ Access to multiple real-time offers — not just one offer from a single buyer.
✅ A fully managed process — we handle the paperwork, underwriting, and buyer negotiations.
✅ Zero upfront fees or obligations — you don’t pay anything unless you accept an offer and close.
✅ An expert team on your side — providing clear answers, personalized support, and long-term guidance.
With the Summit Life Marketplace, we’ve simplified and strengthened the life settlement experience. You won’t need to chase buyers or navigate the process alone—we take care of the heavy lifting so you can focus on what matters most.
Whether you’re looking to fund long-term care, cover medical costs, or simply access liquidity from your policy, we’ll help you do it the right way—with confidence and clarity.
Final Thoughts
Paying for long-term care shouldn’t mean sacrificing your financial security or burdening your loved ones. If you no longer need your life insurance policy or can’t afford to keep it, consider a life settlement as a smart, practical way to fund care—while preserving the dignity and comfort you deserve.
If you’re ready to explore your options, reach out to Summit Life Settlements for a free, no-obligation policy review. We’ll help you discover whether you can cash out your life insurance policy and get the funds you need—when you need them most.
Frequently Asked Questions
1. What is a life settlement?
A life settlement is the sale of a life insurance policy to a licensed third party for a lump sum cash payment. The buyer becomes the policy owner and beneficiary, pays future premiums, and collects the death benefit later.
2. Can I use a life settlement to pay for long-term care?
Yes. The proceeds from a life settlement can be used for any purpose, including paying for assisted living, home health aides, nursing homes, or memory care facilities.
3. How does a life insurance settlement differ from surrendering my policy?
Surrendering returns the cash value from your insurance company—typically a small amount. A life settlement usually pays 3 to 5 times more than the surrender value by selling the policy on the secondary market.
4. Who qualifies for a life settlement?
Most sellers are 65 or older or have a serious health condition, and own a policy with a death benefit of $100,000 or more. You may also qualify if you’re younger but terminally or chronically ill (viatical settlement).
5. Can I cash out a term life policy?
Yes, if it’s convertible to a permanent policy. Many people are unaware that convertible term policies can qualify for a life settlement once converted.
6. How much is my policy worth in a life settlement?
It varies. Most sellers receive 20% to 60% of the death benefit, depending on age, health, policy type, premiums, and market conditions.
7. Do I still have to pay premiums after I sell my policy?
No. Once sold, the buyer assumes responsibility for all future premium payments.
8. Are there fees involved in the life settlement process?
At Summit Life Settlements, there are no upfront fees. You only pay if you accept an offer, and those costs are deducted from your payout—not billed separately.
9. Is the money from a life settlement taxable?
In some cases, yes. A portion of the proceeds may be taxable, depending on how much you’ve paid in premiums and your cost basis. We recommend consulting a tax advisor.
10. Will a life settlement affect my Medicaid eligibility?
It could. The lump sum from a life settlement may count as an asset and impact means-tested benefits. However, planning ahead with a financial advisor can help manage eligibility.
11. Is a life settlement the same as a viatical settlement?
No. A viatical settlement is for individuals who are terminally or chronically ill. It’s a subtype of life settlement, but often comes with special tax and eligibility rules.
12. How long does the process take?
Typically 30 to 60 days from application to payment, depending on how quickly medical records and policy documents are obtained.
13. Is the sale of my life insurance policy permanent?
Yes. Once the sale is completed and funds are transferred, the decision is final and irreversible.
14. Can I sell a group or employer policy?
Possibly, if the policy is portable or converted into an individual policy. Many retirees convert their group policy and then sell it for cash.
15. Will my beneficiaries still receive a death benefit?
No. After the sale, the buyer becomes the new beneficiary. However, some sellers opt for retained death benefit structures where a portion of the benefit is left for heirs.
16. How do I know I’m getting a fair deal?
That’s why it’s important to work with a trusted broker like Summit Life Settlements, who shops your policy to multiple buyers and helps you compare offers objectively.
17. Is my policy too small to sell?
Policies under $100,000 may still qualify, but they typically generate smaller payouts. Larger policies are more attractive to investors and offer greater value.
18. Can I start the process if I’m not sure I want to sell?
Absolutely. We offer free, no-obligation policy reviews to help you understand your options. You’re not locked into anything unless you accept an offer.
19. How do life settlement buyers make money?
Buyers invest in your policy and profit when the death benefit is paid out. They take on the risk of paying premiums in the meantime, so your health and life expectancy impact their offers.
20. Why choose Summit Life Settlements?
Summit is an independent marketplace—not just a broker. We present your policy to multiple licensed buyers, maximizing your payout while offering honest guidance and zero pressure.
