Selling a Term Life Insurance Policy: What You Need to Know to Get the Most Cash
If you have a term life insurance policy that you no longer need or can’t afford to maintain, you may be wondering: Can you sell a term life insurance policy? The short answer is yes—in many cases, a term policy can be sold for cash, especially if it’s convertible to a permanent policy.
At Summit Life Settlements, we specialize in helping policyholders unlock hidden value by selling a term life insurance policy through a life settlement. This often results in a payout far greater than the policy’s surrender value—or the $0 you might get if the policy lapses.
Let’s walk through how it works, who qualifies, and how to use our sell term life insurance policy calculator to see what your policy could be worth.
What Is a Term Life Insurance Policy?
Term life insurance provides coverage for a specific period, usually 10, 20, or 30 years. If the insured passes away during the term, the policy pays a death benefit to the beneficiaries.
Unlike permanent life insurance, term policies do not build cash value. When the term ends, the coverage ends—unless the policyholder renews or converts it. Because of this, many people assume they have no value once the term expires. But that’s not always the case.
Can You Sell a Term Life Insurance Policy?
Yes, you can sell a term life insurance policy—if the policy is either still in force or convertible to a permanent policy.
A convertible term policy allows the policyholder to change it into a permanent policy without a medical exam, which makes it eligible for a life settlement.
Life settlements allow policyholders to sell their life insurance policy to a third-party buyer for a lump sum cash payment. The buyer takes over premium payments and becomes the new beneficiary of the policy.
If your term policy meets the criteria, you could receive several times more than the surrender value—or even thousands of dollars instead of nothing.
Who Is Eligible for Selling a Term Life Insurance Policy?
You may qualify to sell your term life insurance policy if:
- You are 65 years or older (or younger with significant health conditions)
- Your policy has a face value of at least $100,000
- The term policy is still active or convertible
- You no longer need the coverage or can’t afford premiums
Not sure if your policy qualifies? Summit Life Settlements offers a free evaluation to determine your eligibility and estimate your potential payout.
Selling Term Life Insurance Policy: Common Scenarios
There are many reasons why people consider selling their term life insurance policy:
- The term is nearing expiration and renewal premiums are unaffordable
- The original need for coverage (e.g., mortgage, children) no longer exists
- The insured has had a decline in health and needs cash for medical expenses
- The policyholder wants to fund retirement or long-term care
Rather than letting the policy expire worthless, a life settlement provides a financial return on years of premium payments.
What If My Term Policy Is Not Convertible?
If your term policy is not convertible and is close to expiration, it may be more difficult to sell. However, you still have options:
- If your health has declined, the policy may still attract buyers.
- Some buyers are interested in short-term, high-risk policies nearing the end of their term.
- Contact Summit Life Settlements for a policy review. Even non-convertible term policies can sometimes qualify under the right conditions.
Sell Term Life Insurance Policy Calculator
Wondering what your policy is worth? Summit Life Settlements offers a confidential sell term life insurance policy calculator to help estimate the value of your coverage.
This tool considers:
- Age and health status of the insured
- Policy type and face value
- Remaining term length or convertibility
- Current market demand
While every case is unique, many policyholders are surprised by how much their term policy can fetch. In fact, settlement payouts can range from 10% to 40% of the death benefit, depending on the details.
Real Example: Mary’s $0 vs $46,000 Decision
Mary, 72, had a $250,000 term policy with 18 months remaining. Her premiums were rising, and the policy had no cash value. She was preparing to let it lapse—until she contacted Summit.
After evaluating her policy, we helped her convert it into a permanent policy and list it for sale. She received four offers and ultimately sold it for $46,000—a life-changing amount that would have otherwise been lost.
How to Sell Your Term Life Insurance Policy
Here’s what to expect when you work with Summit Life Settlements:
- Free Policy Review
We review your term policy and determine if it’s convertible or sellable in its current form. - Medical and Financial Assessment
We request basic medical records and information about your premiums and policy terms to assess value. - Market the Policy
We share your case with licensed buyers who compete to make offers. - Offer Review
You choose the offer that works best for you. We help guide you through the process. - Closing
Once you accept an offer, the buyer becomes the new owner and you receive a lump sum cash payment.
The entire process typically takes 4 to 6 weeks, and your privacy and control are protected every step of the way.
Why Summit Life Settlements
When it comes to selling your life insurance policy, choosing the right partner can make all the difference. Summit Life Settlements is more than just a life settlement company — we’re your trusted advocate throughout the entire process. Our mission is simple: to help seniors and policyholders navigate the life settlement market in order to unlock the maximum value of their life insurance through a transparent, competitive, and client-first approach.
We Work for You, Not the Buyers
As a licensed life settlement brokerage, Summit represents your interests exclusively — never the buyers’. We shop your policy to multiple institutional investors, not just one, creating a competitive bidding environment that ensures you receive the highest possible payout for your policy.
Transparency and Guidance Every Step of the Way
Selling a policy can feel complex, but we make it simple. Our team walks you through every step, explaining the process clearly so you always know what’s happening — with no hidden fees, no pressure, and no obligation to sell.
Proven Expertise, Trusted Reputation
Summit Life Settlements is recognized as one of the most trusted names in the life settlement industry, known for professionalism, integrity, and results. We’ve helped countless policyholders transform unwanted or unneeded policies into significant financial resources — for retirement, healthcare, or legacy planning.
Your Goals, Our Priority
Whether your goal is to eliminate costly premiums, access cash for care, or simply make the most of an asset you no longer need, Summit Life Settlements is here to help you make an informed, confident decision that aligns with your financial goals.
👉 Discover your policy’s true market value today.
Get a free, no-obligation review at SummitLifeSettlements.com.
Final Thoughts
If you’re holding a term life insurance policy that no longer serves its original purpose, you don’t have to let it expire without value. With the right guidance, selling your term life insurance policy can provide real cash—money that can be used for medical needs, debt repayment, retirement, or any other goal.
Summit Life Settlements is your trusted partner in this process. We help policyholders just like you understand their options, evaluate the market, and access the maximum value possible through a life settlement.
FAQs About Selling a Term Life Insurance Policy
1. Can I sell my term life insurance policy?
In most cases, yes — but only if it’s convertible. Term life policies that can be converted into a permanent policy (such as universal or whole life) are often eligible for a life settlement. Once converted, the policy has a cash value component and can be sold to a licensed institutional buyer for a lump sum.
2. What does it mean to convert a term life policy?
A term-to-permanent conversion allows you to switch your term life policy into a permanent one without new medical underwriting. This step is necessary because buyers only purchase policies with ongoing value beyond the term period. After conversion, you can either keep the policy, surrender it, or sell it for cash through a life settlement.
3. Why would someone sell a term life policy?
Policyholders often sell their policies when:
The premiums have become too expensive
They no longer need the coverage (e.g., after paying off a mortgage or children becoming financially independent)
The policy is nearing expiration
They want to access immediate cash for retirement, medical expenses, or long-term care
Selling can help you recover value from a policy that might otherwise lapse or expire worthless.
4. How much is my term life policy worth?
The value of your policy depends on several factors, including your age, health, policy size, premium costs, and remaining term. If the policy is convertible, the potential settlement amount typically ranges from 10% to 60% of the death benefit, depending on buyer demand and underwriting.
5. What if my term policy is not convertible?
If your policy cannot be converted, it generally cannot be sold through a traditional life settlement. However, you may still qualify for a viatical settlement (if you have a chronic or terminal illness) or explore other options with your broker, such as term extension riders or refinancing alternatives.
6. How do I start the process of selling my term life policy?
The first step is a free policy review. A licensed life settlement broker like Summit Life Settlements will review your policy details and determine if it’s eligible for conversion and sale. If eligible, your broker will shop your policy to multiple institutional buyers, creating competition to maximize your payout.
7. Are there any fees or upfront costs?
No. There are no upfront fees or obligations to sell your policy. Summit Life Settlements only earns a commission if your policy successfully sells — meaning our incentive is fully aligned with your best outcome.
8. Will selling my term policy affect my taxes?
Yes, potentially. The IRS may treat part of your settlement as taxable income depending on your total premium payments and settlement amount. We recommend consulting with a tax advisor before finalizing a sale to understand your specific situation.
9. How long does the selling process take?
On average, the process takes 8-12 weeks from initial review to final funding. This includes policy evaluation, medical underwriting, buyer bidding, and closing documentation.
10. Why should I work with a broker instead of selling directly?
A life settlement broker represents you — not the buyers. Brokers like Summit Life Settlements create competition among licensed buyers, ensuring you receive the highest market value for your policy. Direct buyers, on the other hand, typically make low initial offers to increase their profit margin.
11. Is selling my term life policy confidential?
Absolutely. Your personal and financial information is protected and shared only with licensed institutional buyers involved in the bidding process. All transactions comply with state and federal privacy regulations.
12. Who can I talk to about my specific situation?
You can schedule a free, no-obligation consultation with Summit Life Settlements. Our experts will review your policy, explain your options, and guide you step-by-step through the process to help you make the most informed decision possible.
👉 Get started at SummitLifeSettlements.com
