How To Sell Your Own Life Insurance Policy In The USA?

life insuranceAre you currently reviewing your life insurance policy and wondering how to get out of your premium payments? Life circumstances sometimes change, as do priorities. In the USA, it’s actually very easy to sell life insurance policy. Of course, there are a few criteria to meet as well as a regulated process to follow. Nonetheless, it’s a perfectly wise strategy to sell life insurance policies if that’s what your current circumstances dictate.

Process to Sell Life Insurance Policy

Selling a life insurance policy is known as a life settlement process. Essentially, you transfer your premium payments, along with your death benefit cash payout, to a third party. In the USA, both accredited investors and institutional investors can buy your life insurance in exchange for a lump sum of cash. This can be very beneficial if you need money for your retirement or even medical expenses for a terminal illness, for example.

Clearly though, the downside is that your beneficiaries will no longer get your death benefit cash payout. Many people, though, get to the stage where that’s no longer relevant for them, for various reasons. If that’s you then don’t make the mistake of just cancelling your life insurance policy and waiting for the cash surrender value. That’s because it’s bound to be less than what investors are willing to pay you for the advantage of getting your death benefit payout.

Now that you’re considering life settlements, let’s have a look at some of the main points of the process:

  • Qualify for a life settlement
  • Paperwork
  • Broker or life settlement company
  • Closing Package and Transfer of Ownership

Qualify for a life settlement

An important point is that your life insurance is an asset because it has a cash value and a payout. You should also bear in mind that you can’t actually sell a term life insurance policy for cash. If you hold one of those, you will have to convert it into a permanent life insurance. That means choosing to sign up for either a whole or universal life insurance. The latter has a more flexible structure but it doesn’t matter if you want to sell life insurance policy.

Other criteria you’ll have to meet are being at least 70 and with the value of your policy at least at $200,000. Otherwise, basically, investors won’t be interested in doing a life settlement with you. Although, if you’re under 70 and facing a terminal illness then you might be able to do a viatical life settlement process which is exactly the same process. Nevertheless, investors can expect to get your death benefit cash payout sooner after you sell your life insurance because of your reduced life expectancy.


Once you start the life settlement process, you’ll have to gather your papers. These include your medical records and life insurance policy details. From these, life settlement investors can make a judgment and provide you with a quote.

Broker or life settlement company

It’s worth noting that you can follow the life settlement process directly with investors yourself if you prefer. Then again, you can also work with a broker when you sell life insurance policy. The choice is yours and sometimes researching both options at the start of your process can help your decision.

Closing Package and Transfer of Ownership

Regardless of whether you sell life insurance policy through a broker or directly, you’ll be able to review some quotes and agree on your preferred one. Afterward, you’ll receive the closing package. Then, once everything is signed, there will be a transfer of ownership for your life insurance policy. Finally, you’ll get your lump sum cash payout.

Pros and Cons of How to Sell Life Insurance Policy through Brokers

If you’re wondering “how do I sell my life insurance” then here are few themes that stand out when working with brokers:

  • Better deals
  • Commissions
  • Peace of Mind

As you can imagine, the main advantage of dealing with a broker is that their job is to find you the best deals. After all, they have the network and relationships to be able to access information and deals that you simply can’t when you sell life insurance policy on your own. Of course, it does mean that you’ll have to pay a commission. Although, don’t forget that sometimes peace of mind is worth a little extra money. These can be overwhelming moments during our lives. That’s why most people appreciate having a guide by their side when they sell their life insurance. After all, it can make a difference to our well-being.

Final Recommendations for How to Sell Life Insurance Policy

Selling your life insurance is a well-defined process in the USA. It’s regulated with plenty of advisors and brokers to guide you through everything. You’ll have to meet certain criteria. Nevertheless, after that, a life settlement broker can get you the best deals and support you through this difficult time.

If you have any questions, please ask below!