How To Sell Your Life Insurance Policy

How To Sell Your Life Insurance Policy

When you buy life insurance, the original plan is that your loved ones and/or business will be able to get along (financially) without you. But sometimes there comes a time when the payments are no longer realistic, or your dependents are no longer dependent on you. If this is the case for you, then selling your life insurance policy (life settlement) may be an option.

Qualifying To Sell Your Policy

Most people who choose to sell their life insurance policies are those who would fall under the category of “senior citizen.” These are people who have maintained ┬áthese policies for years, and now have the option to sell them off if they so choose. That being said, younger people may have the ability to sell a policy as well if they have certain health conditions.

According to Nerd Wallet, life insurance policies worth $100,000 or more on their face are the most sought after types of policies. There is a market for policies that are less than that, but it is much more limited. Someone looking to make the sell quickly should have a policy that meets what the market is looking for.

The Viatical Settlement Option

There is another option for certain types of people. This option is called a viatical settlement. The individual who qualifies for this type of settlement is a person who has a terminal illness and is expected to live twenty-four months or less. That person may have the ability to sell their life insurance policy via viatical settlement. When they do so, they are selling off the settlement for a portion of the face value that it has. They do not get back everything that it is worth, but they get the cash right away.

Brokers And Bids

Someone who is interested in selling their life insurance policy and is eligible to do so must contact a broker to help make this happen. The broker shops the policy to bidders who determine the top price that they are willing to pay for this settlement. The highest bid is accepted, and then the policyholder is able to sell off the policy.

In order to make this sale a possibility, it is necessary to provide all of the details of the policy as well as the details of your personal health history to the broker to get it sold. They cannot proceed until you have done this. Once they have all of that information, the policy can go out to the market to find a bidder.


Once the policy is sold, you may have to periodically check in with the buyer to confirm that you are still alive. Once you have died, the buyer of your policy will receive the financial benefit and therefore their profits.