Is It Legal To Sell Your Life Insurance Policy?

Did you know you can sell all or a portion of your life insurance policy, even term insurance?

(4 minute read)

Have you ever wondered “Can I sell my whole life insurance policy?” Maybe you’re curious to know how much you get when you sell a life insurance policy. Perhaps you’re unsure if it’s even legal to do this! We’ll explore selling life insurance policy procedures and answer these questions and more in this short guide. 

Is It Legal To Sell Your Life Insurance Policy?

For the most part, yes. There are some stipulations around selling life insurance policies that are important to understand. First of all, there are two types of settlements: 

  • Life settlements

These are designed for seniors who have a life expectancy of fewer than 15 years and have had a chronic  medical condition develop after their policy was issued.

  • Viatical settlements

These are for terminally ill individuals who have a life expectancy of fewer than two years.


When selling your life insurance policy, there are conditions that need to be met

These include: 

  • Age of the policy holder 

Typically, the policy holder must be over 65 years of age in order to qualify for a life settlement. 

  • Type of life insurance policy

As long as it can be converted to a permanent policy plan, any life insurance policy is eligible for sale. This includes universal life, whole life, survivorship universal life, and survivorship whole life policies. You can sell your term life insurance policy legally as long as it is convertible. It may cost money to convert your policy. 

  • Death benefit amount 

The death benefit amount usually needs to be $100,000 or more. 

If you’re interested in learning more about the legal ins and outs of selling your policy, you can meet with a life settlement advisor who will help you understand your options. You can also use our online tool, the sell my life insurance policy calculator, to determine if you might be eligible for a life settlement.

Can You Sell Your Life Insurance Policy if You Are Under 65?

In general, no. However, there are a few extreme cases where you may be able to, like having a  severe medical condition or a terminal illness. In these cases, a viatical settlement may be more appropriate. The ideal candidates for life settlement are 65 or older. 

Is Selling Your Life Insurance Policy a Good Idea?

It depends on your specific circumstances. For some people, selling a life insurance policy is a wise financial decision. For others, it may not make sense for their lifestyle and current needs. It’s important to consult with your financial or wealth advisor to make sure that this decision is the right one for you. 

Some of the reasons that may make selling your life insurance a good idea are: 

  • You need immediate liquidity
  • Your premiums have become a burden
  • Your circumstances have changed
  • You want to downsize your coverage

Selling your policy may be just the ticket to help you in any or all of these instances. 

How Much Can I Sell My Life Insurance Policy For?

The amount of money you’ll receive for your policy depends on the eligibility factors and your unique circumstances that we’ve discussed above. The good news is that selling your life insurance policy usually puts more money in your pocket at the end of the day than surrendering your policy! Life settlements can potentially yield between four and seven times the amount of money than surrendering a policy. 

Life Settlement Advisors: Your Trusted Partner for Selling Policies

Figuring out what to do with your life insurance policies can be a difficult task. It’s one you don’t have to do alone. Here at Life Settlement Advisors, we work closely with you to make sure you have all the information you need to make an informed and wise decision. We’ll help you determine if you qualify, and then walk through your options together so you don’t have to worry about finding the best company to sell your life insurance policy to all alone. 

Did you know you can sell all or a portion of a life insurance policy, even term insurance? Selling an unwanted life insurance policy is no different than selling your car, home or any other valuable asset that will create immediate cash. Contact us today to learn more.

Get in touch with Life Settlement Advisors today to take the first step toward converting your policy into cash.

Leo LaGrotte

Life Settlement Advisors


Get in touch with Life Settlement Advisors today to take the first step toward converting your policy into cash.
Life Settlement Advisors
Leo LaGrotte
At Life Settlement Advisors, we strive to be a voice of confidence and assurance for our clients. Our goal is to educate you about the life settlement process so you can make an educated decision about whether it is right for you.