Yes, term life insurance policies can qualify for a life settlement, but only under certain conditions. The most important requirement is that the policy must be convertible, meaning it can be changed into a permanent form of insurance such as universal life without undergoing a medical exam. '
Buyers prefer permanent coverage because they need the ability to keep the policy active long-term. If a term policy still has conversion rights available, or if it has a substantial amount of term remaining, it may attract buyer interest. Many seniors are surprised to learn that a term policy nearing expiration can still hold value if conversion is possible. Policies that are not convertible or that expire soon without any conversion options usually do not qualify.
However, it is still worth checking because some carriers offer flexible conversion windows or extended rights that policyholders may not be aware of. For seniors with term policies, exploring a settlement before coverage expires can prevent losing the policy entirely.
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