The face value of life insurance policies continues to trend upward. In the decade between 2013 and 2023, the average purchase value increased by over $40,000.
But what happens if you no longer need some or all of your policy? Maybe you’d like to reinvest that money somewhere else, or perhaps you have an urgent health need that requires liquidity.
No matter your reason, you need to know: How much can you get for your life insurance policy? Even with policies of $200,000, $500,000, or $1 million, the amount you receive is often a fraction of what your policy is worth.
Market conditions, policy age, remaining premium costs, and changing financial needs all affect whether 2026 is a good time to seek buyers. For 26 years, Life Settlement Advisors has served as a trusted broker, helping people make educated decisions about selling policies.
Here’s how life settlement brokers get you more money for your policy.
What a Life Insurance Policy Is and How It Works
Your life insurance policy is a formal agreement between you and your insurance company. You make regular premium payments, and in return, the insurance company promises to provide benefits to your chosen beneficiaries, offering financial support and peace of mind during a difficult time.
Your premium amounts depend on factors such as your lifestyle, health, age, and the coverage amount in your policy. Your death benefits are set in the policy, and differ from the market value of that policy should you choose to sell it. For example, if a buyer offered nearly the full amount on a $1 million policy, they would lose money after paying premiums and costs.
Factors that change over time, such as policy structure, market conditions, and your health and age, determine the sales value when you are selling a life insurance policy.
How Policy Type and Structure Affect Value
The type of life insurance policy you hold — and its structure — affect its market value. A whole life insurance policy has fixed premium payments and death benefits that never decrease. It is a permanent policy that continues as long as you keep up with your premium payments, and it accumulates cash value.
If you have a universal life insurance policy, you make changes to your premium payments, which in turn could cause death benefits to fluctuate. Universal life policies are also permanent and accumulate cash value as long as you keep up with premium payments.
A term life insurance policy covers you for a set period of time, for example, 10 or 20 years. It holds no cash value, and when the term expires, premiums will increase, or coverage may end.
What Factors Determine a Life Insurance Policy’s Market Value in 2026?
The market value of a life insurance policy depends on its type and conditions that change over time and vary between policyholders. A company offers a life settlement if becoming the policyholder’s beneficiary makes financial sense. The costs of paying premiums and administrative costs must be balanced against the benefits the buyer expects to eventually receive.
These calculations, driven by factors such as the policyholder’s age and overall health, affect the life settlement average payout. Not all policies have market value, and outcomes for those that do vary. As we explain in the Life Settlement Advisors’ Life Settlement Eligibility Guide, several factors will affect the value of your offer.
Age and Health of the Insured
Life insurance policy buyers generally look for sellers aged 65 or older who have experienced a change in health since the policy was originally purchased. Younger people may qualify if they’ve experienced a significant decline in health.
Policies with shorter life expectancies often receive a higher percentage of the policy’s benefit as a payout, because the anticipated ongoing premium payments and administrative costs are lower. These considerations help buyers determine offers while balancing financial risk and long-term obligations.
Policy Type, Size, and Premium Costs
You cannot sell a term life insurance policy unless you convert it to a permanent policy. Buyers seek permanent policies, such as whole or universal life, that remain in force as long as they continue to pay the premiums.
The death benefit amount of your policy affects your payout because it is part of the value to a potential buyer as the new beneficiary. Your policy must have at least $100,000 in death benefits to qualify for a life settlement.
The remaining outstanding premium obligations under your policy are part of the cost-benefit balance for potential buyers. If buyers anticipate paying premiums for an extended period, they may offer less or not make an offer.
Market Conditions and Buyer Demand
The potential value of your policy depends on how many buyers are willing to offer settlements. Shopping your policy around to multiple potential buyers is how life settlement brokers get you more money. Multiple offers give you a better chance of receiving one or more that meet your financial or estate planning needs.
When buyers seek safe havens or diversified holdings and are willing to wait for profits, they are more willing to make offers. This willingness to purchase based on broader life settlement market conditions can increase your offers.
A cash-value life insurance policy earns interest, which increases its value. Whole life insurance policies have fixed interest rates, while universal life policies have interest rates that may change with market conditions. Some policies also include dividends, which increase value.
What Policyholders Can Realistically Expect in 2026
As described in the Deloitte Global Economics Research Center’s United States Economic Forecast, there is a fair amount of economic uncertainty in 2026 due to shifts in the market and geopolitics. This uncertainty can affect life settlement values and change who buys life insurance policies, but it doesn’t mean companies will stop offering life settlements.
Policyholders facing financial difficulties or dealing with an illness may seek life settlements to stabilize their immediate financial situation. Companies may diversify assets by making long-term investments in life insurance policies.
Interest rates, as well as economic indicators, such as manufacturing and consumer spending, can give you some clues about where the life settlement market is heading. Keep in mind that economic conditions can be highly fluid, so making quick decisions isn’t the best way to reach your financial goals.
Get in touch with Life Settlement Advisors today to take the first step toward converting your policy into cash. You can also call us at 1-888-849-0887 for more information. We look forward to working with you and your family members or financial advisors to make this critical decision.
