Understanding Life Settlements: How to Turn Your Policy Into Cash
For many seniors and policyholders, life insurance was purchased decades ago with a clear purpose—providing financial support to loved ones in case of death. But life changes. And so do financial needs. If you’re holding a life insurance policy you no longer want, need, or can afford, a life settlement may offer the financial freedom you’ve been looking for.
At Summit Life Settlements, we help people just like you understand the value of their policies—and guide them through the life settlement process with confidence and clarity.
What Is a Life Settlement?
A life settlement is the legal sale of your existing life insurance policy to an institutional buyer in exchange for a lump-sum cash payment. The buyer becomes the new policy owner, takes over the premium payments, and eventually receives the death benefit.
You, the original policyholder, receive a cash payout that is significantly higher than the policy’s surrender value—and you’re no longer responsible for premiums.
It’s a powerful financial option that allows you to tap into the real value of your policy while you’re still alive.
Who Are Life Settlements For?
While anyone can explore their eligibility, life settlements are most common among:
- Seniors aged 65 and older
- Individuals with deteriorating health conditions
- Policyholders with universal, whole, or convertible term policies
- Those with policies valued at $100,000 or more
The process is also increasingly popular among estate planners, financial advisors, and seniors looking to reduce costs or increase liquidity in retirement.
If you’ve been asking yourself, “what is a life settlement and does it apply to me?”—Summit can help answer that with a quick, obligation-free review.
Why Seniors Choose Life Settlements
Senior life settlements have grown in popularity for a variety of reasons:
- Rising medical or long-term care costs
- Premiums becoming unaffordable on fixed income
- No longer needing the policy (children are grown, spouse has passed, etc.)
- Wanting to turn a dormant asset into immediate usable cash
- A desire to support family, pay off debt, or enjoy retirement more comfortably
Instead of letting a policy lapse or surrendering it for a small return, selling it can offer real financial impact.
Real Example: A Life-Changing Decision
Linda, age 72, had a $250,000 universal life insurance policy. She was considering letting it lapse due to premium costs.
Instead, she contacted Summit Life Settlements. After a brief review, we submitted her policy to our network of licensed buyers. She received a payout offer of $62,000—far exceeding the $8,000 her insurer would have provided in surrender value.
That money allowed her to eliminate credit card debt and enjoy the retirement she worked hard for.
How Does a Life Settlement Work?
The process is simpler than most people expect. Here’s how it works with Summit:
- Free Policy Review – We assess your eligibility based on policy type, face value, health history, and premium cost.
- Market to Institutional Buyers – We connect your policy to licensed buyers and negotiate competitive offers on your behalf.
- Choose Your Best Offer – You receive multiple offers and can choose the best one—or decide not to move forward.
- Close and Get Paid – Once you accept an offer, we handle all the paperwork. Your cash payment typically arrives within 4–6 weeks.
There’s no cost for the evaluation, and no pressure to sell.
What Is the Value of a Life Settlement?
Your life insurance policy is worth more than you might think. In most cases, a life settlement offers 2–5x more than the policy’s surrender value.
Here are a few variables that influence your policy’s value:
- Your age and health
- Type of policy (whole, universal, or term)
- Policy face value and premium costs
- Length of time the policy has been in force
Why Summit Life Settlements?
We are more than just a life settlement company—we are your partner and advocate. Here’s why seniors choose Summit:
- We work for you, not the buyers: As a brokerage, we shop your policy around to top institutional investors—not just one.
- Multiple offers = maximum value: Our competitive bidding process ensures you get the best payout, not the fastest.
- Free consultation and no upfront fees: We never charge for reviews, and you’re never obligated to move forward.
- Transparent, supportive guidance: We explain every step in plain language, with no surprises.
Summit Life Settlements is known as one of the most trusted names in senior life settlements, and we are proud to help retirees and families navigate the life settlement market in order to unlock new financial opportunities.
Is a Life Settlement Right for You?
Selling your life insurance policy is a personal decision—but it’s one that could provide immediate financial relief and long-term peace of mind.
If you’re paying into a policy you no longer need or want, it may be time to consider a better option.
At Summit Life Settlements, we help you unlock the hidden value in your policy—so you can live more comfortably and make informed financial decisions for the future.
Your policy may be worth far more than you think.
Contact Summit Life Settlements or try our free calculator to explore your options.
FAQs: Understanding Life Settlements
1. What is a life settlement?
A life settlement is the sale of an existing life insurance policy to a third-party institutional investor for more than its cash surrender value but less than its death benefit. In exchange, the policyholder receives an immediate lump-sum cash payment, and the buyer becomes responsible for all future premiums and receives the death benefit when the insured passes away.
2. Why would someone sell their life insurance policy?
People sell their policies for many reasons — rising premiums, changing financial goals, the loss of a beneficiary, or simply because the policy is no longer needed. A life settlement allows you to turn a non-performing asset into usable cash that can fund retirement, long-term care, or other financial priorities.
3. Who qualifies for a life settlement?
Typically, individuals 65 years or older or those with a serious health condition may qualify. Policies usually need a death benefit of at least $100,000, though this can vary. Both universal life and convertible term life policies are commonly accepted.
4. How much is my life insurance policy worth?
The value depends on several factors — your age, health, policy type, death benefit, and premium costs. On average, a life settlement pays four to ten times more than the policy’s surrender value. The best way to know your value is through a free policy review with a licensed broker like Summit Life Settlements.
5. What’s the difference between a life settlement broker and a direct buyer?
A broker works for you — not the buyers. Brokers like Summit Life Settlements represent policyholders, shopping your policy to multiple institutional investors to create a competitive bidding process. This ensures you get the highest possible payout. A direct buyer only makes one offer, which may be below market value.
6. Are life settlements regulated?
Yes. The life settlement industry is regulated in most U.S. states to protect consumers. Licensed brokers and providers must follow strict state guidelines that ensure transparency, fairness, and compliance throughout the transaction.
7. Are there any costs or fees to get started?
No. A reputable life settlement broker offers free consultations and no upfront fees. You’re under no obligation to move forward unless you choose to accept an offer. Brokers are typically compensated by the buyer only after a successful sale.
8. Will I owe taxes on the money I receive?
In some cases, yes — portions of your life settlement may be taxable, depending on your policy’s basis (premiums paid) and cash value. It’s best to consult with a tax advisor or financial planner to understand your specific situation.
9. How long does the life settlement process take?
The process generally takes 6 to 12 weeks from application to closing. This includes policy review, medical underwriting, obtaining carrier documents, and facilitating offers from buyers. Summit Life Settlements keeps clients updated at every stage.
10. Can I keep part of my policy’s death benefit after selling it?
Yes — in some cases, sellers can retain a portion of the death benefit through a retained death benefit option. This allows you to receive cash now while keeping some coverage in place for your beneficiaries.
11. Will selling my life insurance policy affect my government benefits?
Potentially. The cash you receive from a life settlement could impact eligibility for needs-based programs such as Medicaid. It’s important to review this with a qualified advisor before completing a sale.
12. What can I use the money for?
There are no restrictions on how you use your settlement funds. Many people use the money to pay for healthcare, long-term care, medical bills, debt reduction, retirement income, or simply to improve quality of life.
13. How do I know if a life settlement is right for me?
A life settlement may be right for you if your policy no longer serves its original purpose, premiums are becoming unaffordable, or you could benefit more from a cash payout today. Summit Life Settlements provides free evaluations to help you decide — with no pressure and full transparency.
14. Why choose Summit Life Settlements?
Summit Life Settlements is an independent life settlement brokerage dedicated to helping policyholders achieve maximum value for their life insurance policies. We work for you, not the buyers, using a competitive bidding process to ensure the best outcome — with no upfront fees and no obligation to sell.
