Seniors who sold their life insurance policies through the secondary market in 2025 received almost nine times what their insurer would have paid on surrender. That’s a fact coming from the LISA Member Data Collection Survey of 2025, the most comprehensive third-party data available on the secondary market.
If you’re holding a policy you no longer need, the 2025 LISA data tells you that you may have more options than your insurer has let on. This article walks you through why there’s such a big difference between what insurers pay on surrender and what buyers on the secondary market are willing to pay, and what it would take for you to access the secondary market.
What the 2025 Numbers Actually Show
The LISA data shows that consumers who sold their life insurance policies through a LISA member received an average payout of $212,066. The average cash surrender value offered by insurers that same year was $24,360. That is a difference of almost nine times, or approximately 900% more, in favor of the secondary market.
What changed most in 2025 was how little insurers were willing to pay. The average cash surrender value fell 27% year-over-year, dropping from $33,493 in 2024 to $24,360. At the same time, the secondary market continued to pay more.
Transaction volume did grow, though. LISA members completed 2,955 transactions in 2025, up from 2,699 in 2024. Total proceeds paid to consumers reached $626.6 million, returning $554.6 million more than those same policyholders would have received through surrender or lapse.
Stepping back further, the five-year record is just as striking. From 2021 through 2025, LISA members paid consumers $3.6 billion for policies they no longer needed, approximately $3 billion more than what surrender would have returned across almost 15,000 settled policies.
Why the Gap Widened in 2025
The gap between what insurers pay and what the secondary market returns grew in 2025 because both sides moved, but in opposite directions. Insurers offered 27% less than they did the year before. Institutional buyers, meanwhile, completed almost 10% more transactions and collectively paid out more than $626 million to sellers.
Cash surrender values are calculated by the insurer based on the policy’s internal account value, minus surrender charges and applicable fees. When those internal returns decline, the surrender value does as well. The secondary market doesn’t use that calculation at all. Institutional buyers price a policy on what the death benefit is worth to them, which is why the two figures can drift so far apart.
When one side of a market offers less, and the other offers more, the divide between them grows. That’s what the 2025 data shows, and it’s not a one-year outlier either. The five-year trend shows a secondary market that has consistently delivered multiples of what insurers were willing to pay through almost 15,000 transactions and different economic conditions.
Cash Surrender Value vs. Secondary Market Value: What the Difference Actually Means
Your insurer calculates the cash surrender value based on what you paid in, minus surrender charges and any outstanding loans. It is a contractual figure set by the company that sold you the policy, and it reflects their interest in the transaction, not yours.
Secondary market value works differently. Institutional buyers price a policy based on what the death benefit is worth to them as a future payout, discounted against how long they expect to pay for premiums before collecting it. That calculation usually gives you a much higher number because it is driven by competition among multiple buyers, each motivated to purchase the policy at the best price they can justify.
The practical difference between the two is what the 2025 LISA data quantifies. One of the most important things you can do before selling or surrendering your policy is understanding which number you’re being offered and which one you could be getting.
How a Broker Produces the Better Outcome
The better outcome in the LISA data comes from a specific process. An independent broker submits your policy to multiple institutional buyers at the same time, and those buyers compete against each other to win. That competition is what drives the number up. A single buyer approached directly has no incentive to offer more than the minimum you’ll accept. Multiple buyers bidding simultaneously against each other do.
A broker also negotiates after the offers come in, adding another layer of value that a direct sale can’t replicate. How a broker gets you more for your policy comes down to that competitive structure working in your favor at every stage.
The Option Most Seniors Don’t Know They Have
The reason there’s a $3 billion gap in the five-year data is mostly seller awareness. Many of the seniors who surrendered or lapsed their policies during that period didn’t choose the worse outcome on purpose. They just didn’t know they had another option.
That’s what makes the 2025 data worth paying attention to. The secondary market has been there, paying multiples of what insurers offered, over nearly 15,000 transactions. That $554.6 million gap in 2025 alone represents real money that eligible seniors left behind, not because the secondary market wasn’t there, but because no one pointed them toward it.
Life Settlement Advisors exists to change that. If you’re holding a policy you no longer need, how much you can sell your life policy for may be a very different number from what your insurer offered. The data says so, but it’s important to work with a trustworthy team that can take your policy to the second market and negotiate on your behalf.
Find Out If Your Policy Qualifies
The 2025 data is clear about what the secondary market can return. What it can’t tell you is whether your specific policy qualifies. The good news is that you can check that part yourself in five minutes and pay nothing.
Life Settlement Advisors works exclusively on the seller’s behalf, shopping your policy to multiple institutional buyers to help maximize your offers. Find out if your policy qualifies before you make any decisions.
