What is a life settlement?
A life settlement is the sale of an existing life insurance policy to a third-party investor for more than the policy's cash surrender value but less than the death benefit. The buyer takes over premium payments and collects the death benefit when you pass. You receive a lump-sum cash payment now — typically 20–60% of the face value depending on your age and health.
Who qualifies for a life settlement?
Most life settlements involve policyholders aged 65+ with a life insurance policy of $100,000 or more in face value. Your health matters — some health decline actually increases your settlement offer because it shortens the expected holding period for the buyer. Both term (if still convertible) and permanent policies may qualify.
How much will I receive for my policy?
Settlement offers typically range from 20–60% of the face value, but every case is unique. A $500,000 policy might net $100,000–$300,000. The key factors are your age, health status, policy type, premiums, and current cash value. We submit your case to multiple buyers to get you competitive offers.
How does the life settlement process work?
The process takes 60–120 days and involves: (1) collecting your policy documents and medical records, (2) submitting to qualified buyers, (3) reviewing competing offers, (4) accepting an offer and completing paperwork, (5) receiving your cash payment. We guide you through every step at no upfront cost.
Is a life settlement taxable?
The tax treatment depends on your cost basis (premiums paid). Generally: amounts up to your cost basis are tax-free; amounts above cost basis to cash surrender value are taxed as ordinary income; amounts above cash surrender value are taxed as capital gains. Your CPA should review your specific situation.
What happens to my coverage after I sell?
Once the sale closes, you no longer have life insurance coverage — the policy belongs to the buyer. If you still have dependents who need coverage, we can help you explore new coverage options before completing a settlement.
What is the difference between a life settlement and a viatical settlement?
A viatical settlement is specifically for terminally or chronically ill policyholders (typically with a life expectancy under 2 years). Viatical settlements may be completely income tax-free under federal law. Life settlements are for policyholders who are not terminally ill — they follow different tax rules.
Why not just surrender my policy to the insurance company?
Surrendering a policy gives you only the cash surrender value — often pennies on the dollar compared to what a life settlement could net. For example, a policy with $20,000 cash value might sell for $150,000 in a life settlement. If you're considering lapsing or surrendering a policy, explore a life settlement first.
Are there any upfront fees?
No. Our life settlement service is entirely free to policyholders — we're compensated by the purchasing institution from the settlement proceeds. You pay nothing until a sale is completed.