What You Should Know When Selling Your Life Insurance Policy

Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in…

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Written by



Rachael Brennan

Licensed Insurance Agent

Benjamin Carr was a licensed insurance agent in Georgia and has two years’ experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by



Benji Carr

Former Licensed Life Insurance Agent

UPDATED: Feb 17, 2022

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Quick Facts

Some people think selling your life insurance will give you fast cash
You can sell life insurance online
Life settlements and viatical settlements help people get money that’s locked away

There are many reasons why someone may want to sell their life insurance policy. If you want to cash out quickly, you found the right guide for answers.

Before you start, it’s essential to know the market before you sell your life insurance policy for cash. Understanding who you are selling to will help you stay alert for scammers. Also, you might find it difficult to cash out your term life insurance if you’re not a senior and have a low-value policy.

If you aren’t eligible for a sizeable payout from a broker, you still have other options. Keep reading to learn more about selling your life insurance. 

Use our free tool if you’re ready to connect with someone to help you sell your life insurance policy. Enter your ZIP code to find a local life settlement broker or insurance settlement company in your area.  

How to Sell Your Life Insurance Policy Online

Buyers looking to reap the reward of a death benefit are looking for sellers who are at least 65 years old. These sellers may also have a limited life expectancy and a high-value life insurance policy. 

To find your buyer, you will need to go through a broker or a life insurance settlement company. Keep reading to learn more about the best company to sell your life insurance policy to and where to find it.  

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Understanding Life Settlements 

When someone sells their life insurance policy, they carry out a life settlement. This sale is sometimes called a “senior settlement” because the typical buyer is an investor interested in your death benefit. 

A life settlement is when you sell a life insurance policy to a third party for a one-time cash payment. According to the Financial Industry Regulatory Authority (FINRA), a government-recognized non-profit that oversees brokers, the sale proceeds are more than the policy’s cash surrender value but less than the death benefit. 

Another type of life insurance payout is called a viatical settlement. This situation is an arrangement between someone who is terminally ill and a third party for the purchase of a life insurance policy for less than its mature value. 

If your insurance needs have changed or you would otherwise surrender your policies, a life settlement is a great option. However, if you’re looking for fast cash, it may not be the recommended action for your needs. 

Life Settlement Companies 

Life settlements have unintended consequences, and it’s easy to get scammed or shorted in a deal. You want to make sure you find a trusted source to sell a life insurance policy to. 

If you choose to go through a broker, your state’s insurance department might have a list of licensed professionals that can help you sell a life insurance policy for cash. You may also find a life settlement broker at a financial consulting agency or insurance agency in your town. 

Some of the most trusted life insurance companies and brokers are listed below: 

Abacus Life Settlements 
Coventry Direct
Habersham Funding
Institutional Life Services 
Harbor Life Settlements 

Some areas in your life insurance policy that could affect its price or sale include your premium rate, policy terms, and the accreditation of the issuing company. 

Your policy’s value amount will be an essential piece to your final sale proceeds. A high-value policy is likely to sell faster than a low-value policy. 

Remember, you’re shopping for a settlement just as you were shopping for the initial life insurance policy. Get a few quotes, and don’t take the first offer you receive without considering all your options. 

Alternatives to Life Settlements 

There are other options to selling your life insurance, depending on your needs. Two options that are immediately at your fingertips are using the policy’s cash value and/or accelerating your policy’s death benefits provision. 

Borrowing money against your life insurance policy is a quick way to get money fast if you aren’t sure about selling. Some whole life insurance plans have an investment addition that allows you to take out a loan on the cash value. Often, taking a loan from your policy will result in high-interest repayments. 

There are also policy options in which you can keep living with life insurance benefits. Accelerating your death benefits may be subject to fees and taxes that would undervalue your policy amount. 

Another option is to surrender your policy. This alternative to selling your life insurance may be riddled with fees and may not result in the most value, but it offers fast cash. 

Advice for Selling Life Insurance 

No matter how you get rid of your policy, you can count on losing money. 

In a life settlement, you’re likely not going to receive what you agreed upon because you need to pay that third-party negotiator. The proceeds from your sale are subject to taxes and possible fees if you use a company or broker to sell your policy. 

Creditors also have a right to the proceeds for your sale in some states. For tax and legal information, it’s best to speak with a financial or tax advisor. 

In some states, sellers have 15 days to change their minds, return the sale proceeds, and reinstate their life insurance policy. 

You should also be aware that your private information may be subject to third-party sharing after the sale. 

Selling Life Insurance: The Bottom Line 

Whether you are 65 years and up or someone facing overwhelming medical bills, life insurance settlements are fast ways to get cash from your life insurance policy. However, this money comes with a laundry list of warnings. When you’re shopping around for the best price, make sure you’re also speaking with tax advisors so that you’re not surprised by hidden charges later on. 

If you think selling a life insurance policy is your next move, let us help you. Enter your ZIP code now to get in touch with a life settlement expert. 

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Frequently Asked Questions About Sellling a Life Insurance Policy

Those who sell life insurance policy values have rights. Some rules and regulations make sure that life settlements are fair and consumers stay protected. 

Keep reading for frequently asked questions. 

#1 — Is selling your life insurance a good idea?

There are many reasons to sell your life insurance policy. Some of these include: 

You need the money you’ve been investing immediately
You no longer require or want life insurance 
You can’t afford the monthly premiums
You need help paying for medical bills
You’ve run out of options 

Refer to the guide for more information on alternatives to selling your life insurance policy. 

#2 — How much can I get for my life insurance policy?

Payouts are based on your age, health, the value of your policy, coverage amount, the financial performance of your insurance company, etc. 

#3 — How long does it take to sell a life insurance policy?

Don’t rush selling your life insurance policy at the risk of getting scammed. If you link up with a company, you could have the cash in several days or several months. 

# 4 — How do I find a reputable broker?

Brokers can be found in various financial institutions in your hometown. Look at what businesses you have available and who your friends and family trust. You may even bank with someone who can help you out.