Life Settlement Frequently Asked Questions
Welcome to our Life Settlement FAQ page! If you’ve ever wondered, “Can you sell your term life insurance policy?” or what happens when you no longer need or can afford your life insurance, you’ve come to the right place.
We’ve compiled clear, easy-to-understand answers to the most common questions about life settlements. Whether you’re exploring ways to turn your policy into cash or simply learning more about your options, we’re here to help you make informed decisions—without the jargon. Let’s dive in!
Yes, you can sell your term life insurance policy if it’s convertible to a permanent policy. Buyers typically look for policies with significant death benefits and limited premium obligations.
A life settlement is the sale of an existing life insurance policy to a third party for a cash payment that’s greater than the surrender value but less than the death benefit.
People sell life insurance policies to access immediate cash for medical expenses, retirement, paying off debt, or simply because the policy is no longer needed or affordable.
The value depends on several factors, including the policy type, face value, premiums, and the insured’s age and health. A life settlement typically pays more than surrendering the policy. Try our free life settlement calculator to get an estimate!
Typically, seniors over the age of 65 with a policy valued at $100,000 or more can qualify. Health conditions may also make policies more attractive to buyers.
Permanent policies, such as whole or universal life, are most common, but convertible term life policies can also qualify for a life settlement.
Once sold, the policy ownership and beneficiary rights transfer to the buyer, who continues paying the premiums and collects the death benefit when the insured passes away.
Life settlement proceeds are taxable in some cases, depending on your cost basis and the amount you receive. Consulting a tax professional is recommended.
The process typically takes 4–8 weeks, including policy evaluation, underwriting, and receiving competitive offers from buyers. If you have a tight deadline coming up we can work with funds that can offer faster but typically offer less.
Selling a term policy can provide immediate cash, especially if you no longer need the coverage or can’t afford the premiums. It’s often better than letting it lapse.
Risks include reduced life insurance coverage for your beneficiaries and potential tax implications. A life settlement expert can help you weigh your options.
Yes, in some cases you can sell a portion of your policy, allowing you to retain some coverage while still receiving a cash payment.
Use our life settlement calculator to get a preliminary estimate, then connect with our experts for a full policy review and competitive offers.
At LS Hub, we use advanced technology to connect you with a global network of buyers, ensuring a fast, transparent process that maximizes your policy’s value.