Can You Sell a Term Life Insurance Policy?
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.
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
It depends on your age, health, policy size, and whether the policy is convertible. Payouts often range from 10% to 40% of the face value.
Yes. Life settlements are regulated in most U.S. states and are a legitimate financial strategy.
If the policy is convertible, you can still sell it. If not, and the term is nearly up, the chances may be lower—but we’ll still evaluate your case.
Possibly. Proceeds that exceed the total premiums paid into the policy may be taxable. We recommend speaking with a tax advisor.
No. Once sold, the buyer assumes all responsibility. You are no longer obligated to pay premiums or maintain the policy.
