Am I Eligible to Sell My Life Insurance Policy?

If you’ve ever wondered whether you can sell your life insurance policy, you’re not alone. Every year, thousands of policyholders discover that their coverage is worth far more than they thought — and that selling it could unlock thousands of dollars in hidden value.

A life settlement allows you to sell your life insurance policy to an institutional buyer for more than the cash surrender value, but less than the death benefit. The buyer takes over future premiums and becomes the new beneficiary.

But not every policy qualifies. This article explains exactly who is eligible to sell, what buyers look for, and how to find out if your policy is worth something — even if you think it’s not.

Who Can Sell a Life Insurance Policy?

Generally, any policyholder who no longer needs, wants, or can afford their life insurance may be eligible to sell it — provided the policy meets certain criteria.

Life settlements are most common among seniors aged 65 or older who own policies with significant face values, but younger individuals with serious health changes may also qualify.

Typical Seller Profiles

• Seniors whose policies are no longer needed for family protection.
• Retirees seeking to eliminate high premium payments.
• Individuals whose beneficiaries are financially independent.
• Business owners with key-person or buy-sell policies that are no longer relevant.
• Policyholders with changing health or estate planning needs.

If your policy no longer serves its original purpose, selling it could make sense.

Age and Health Requirements

Your age and health are two of the most important factors in determining eligibility.

Life settlement buyers evaluate these details because they directly affect the policy’s value and the expected timeline of the payout.

Typical Age Range

• Most qualifying sellers are 75 or older.
• Some may qualify as young as 65 if health conditions have changed significantly.
• Younger policyholders (below 65) typically only qualify if facing major health challenges.

Health Considerations

Buyers assess medical history, longevity, and overall condition using underwriting data — not to discriminate, but to estimate investment value.
The shorter the expected remaining life expectancy, the higher the potential offer.

If you’ve experienced a decline in health since purchasing your policy, that change can actually increase your eligibility and potential payout.

Minimum Policy Size

Not all policies are large enough to attract buyer interest. Most institutional buyers look for policies with a minimum face amount of $100,000 to $250,000, though the sweet spot is typically $1 million or more.

General Guidelines

• $100,000–$250,000: May qualify for smaller or direct-to-consumer settlement offers.
• $250,000–$1 million: Strong potential for competitive bidding.
• $1 million+: High-value policies that attract multiple institutional buyers.

At Settle, we specialize in helping policyholders with $500,000+ face value policies connect with top buyers through private auctions — maximizing your return.

Policy Type and Structure

Not all life insurance policies are eligible to sell, but most permanent forms are. The key is whether the policy is transferable and maintained by a reputable carrier.

Eligible Policy Types

• Universal Life (UL): The most common and flexible type for settlements.
• Whole Life: Eligible if it has a substantial death benefit and premiums are stable.
• Convertible Term: Term policies that can be converted to permanent coverage are often excellent candidates.
• Variable Universal Life: May qualify if performance and funding are sufficient.
• Survivorship (Second-to-Die): Can be sold, but only once one insured passes or with special buyer arrangements.

Policies That Typically Don’t Qualify

• Employer-provided group life insurance (unless converted to an individual policy).
• Small term policies without conversion privileges.
• Policies with minimal cash value or short duration.

If you’re unsure what type of policy you have, Settle can help review your documents and confirm eligibility within 24–48 hours.

Policy Age and Premium History

Buyers also consider how long your policy has been active and how it’s funded.

Policy Age

Most policies need to be at least two years old due to contestability rules and regulations that prevent immediate resale.

Premium Requirements

• The policy must be in good standing, meaning premiums are current.
• Buyers prefer stable premium schedules that won’t increase drastically.
• If your policy is underfunded, we may still help you restructure it for sale.

Settle’s team can analyze your policy illustration and advise whether it’s viable in its current form or if adjustments could make it more marketable.

Ownership and Insurable Interest

To sell a policy, you must be its legal owner and have the right to transfer ownership.

If you purchased the policy yourself, you likely meet this requirement. If it’s owned by a trust, business, or other entity, additional documentation will be required.

Ownership Scenarios

• Individual Ownership: Most common and straightforward.
• Trust Ownership: Requires trustee approval but is eligible.
• Corporate or Key-Person Policies: Can be sold if no longer needed for business purposes.
• Third-Party or Stranger-Owned Life Insurance (STOLI): Not eligible due to legal restrictions.

Your Settle specialist will review ownership documents to ensure compliance with state regulations.

State Regulations and Licensing

Life settlements are regulated at the state level in almost every U.S. jurisdiction.

To protect consumers, each state sets its own licensing and disclosure requirements. In most cases, the policy must be at least two years old (some require five) before it can be sold.

Settle works only with licensed buyers and providers in every regulated state, ensuring your transaction is fully compliant.

If you live in a state with unique rules, we’ll walk you through them before any process begins — no surprises, no gray areas.

Financial Need and Motivation

Eligibility also depends on your personal situation and goals. Buyers evaluate motivation not to judge, but to confirm that selling aligns with your financial objectives.

Common Motivations

• You no longer need the coverage.
• You can’t or don’t want to keep paying premiums.
• Your beneficiaries are financially independent.
• You want to reallocate funds to retirement, healthcare, or investments.

There’s no single “right” reason to sell. The most important factor is whether it improves your financial well-being.

How Buyers Evaluate Policies

Institutional buyers assess each policy’s investment potential based on a few core metrics. Understanding these can help you anticipate your eligibility and potential value.

Main Evaluation Factors

1. Age and Health of the Insured — Determines projected life expectancy.
2. Policy Size and Type — Larger, permanent policies attract more interest.
3. Premium Costs — Lower ongoing premiums increase buyer demand.
4. Carrier Rating — Policies from A-rated carriers are most desirable.
5. Surrender Value vs. Death Benefit — Buyers compare intrinsic value to potential returns.

Settle’s valuation team uses these same principles to estimate your policy’s market range before presenting it to buyers.

Cases That May Not Qualify

While every case is unique, certain scenarios rarely meet buyer criteria. Knowing these upfront helps set realistic expectations.

Typically Ineligible Situations

• The policyholder is under 65 and in excellent health.
• The death benefit is under $100,000.
• The policy has very high ongoing premiums compared to its face value.
• The policy is newer than two years old.
• The carrier has a low financial rating or poor performance history.

Even if your case falls into one of these categories, it’s still worth requesting an appraisal. Market demand changes, and new types of buyers emerge regularly.

The Appraisal Process

The fastest way to know if you qualify is to get a free life settlement appraisal.

At Settle, this takes just a few minutes. You answer simple questions about your policy, age, and coverage amount. Our specialists then evaluate your case to see if it meets buyer criteria.

What You’ll Need

• Policy type and face value.
• Carrier name.
• Year issued and premium amount.
• Basic health summary.

You’ll receive an initial estimate within 24–48 hours. If your policy appears eligible, we’ll request additional information to begin the bidding process.

What Happens If You Qualify

Once we confirm eligibility, Settle handles everything:

1. Gathering necessary documents.
2. Packaging your policy for buyers.
3. Presenting it through a private auction.
4. Delivering competitive offers for your review.

You’ll have full visibility into the process, and there’s no obligation to accept any offer. You stay in control the entire time.

What If You Don’t Qualify?

Even if your policy doesn’t currently meet buyer criteria, there are still options.

Alternative Paths

• Retain the policy if it still fits your goals.
• Explore other liquidity options like policy loans or accelerated benefits.
• Stay in touch with Settle — as markets shift, new buyers enter who may later be interested.

We’ll always tell you the truth, even if that means advising you to keep your policy.

Why Get an Appraisal Anyway

Many people are surprised to learn that most life insurance policies have market value — even if they don’t immediately qualify for sale.

An appraisal costs nothing, and the information is valuable whether you sell or not.

Reasons to Get an Appraisal

• Learn your policy’s true market worth.
• Compare offers to your surrender value.
• Plan your estate or retirement with accurate data.
• Gain peace of mind knowing your options.

Knowledge is power, and an appraisal puts that power back in your hands.

How Settle Simplifies the Process

Settle was built to make life settlements modern, transparent, and accessible.

Our team of licensed experts and digital tools streamline every step — from eligibility review to payout.

Here’s What You Can Expect

• Fast Appraisal: See if your policy qualifies within 24–48 hours.
• Private Bidding: Multiple buyers compete, driving higher offers.
• Low Commissions: You keep more of what your policy is worth.
• Full Transparency: Every fee and offer is clearly shown before you decide.

Settle brings fairness, competition, and clarity to a process that used to be confusing and slow.

The Bottom Line

If you’re over 65 and own a life insurance policy you no longer need, there’s a good chance you could be eligible to sell it.

Eligibility depends on your age, health, policy size, and type, but even if you’re unsure, the first step is simple — get a free appraisal.

Selling a policy can provide financial freedom, peace of mind, and a chance to enjoy the rewards of what you’ve built over time.

Your policy might be worth far more than you think.