Thinking about how to sell my life insurance policy? You’re not alone. Every year, thousands of policyowners discover that a policy they no longer need — or can no longer afford — may have real market value. A life settlement allows you to sell an in-force life insurance policy to a licensed institutional buyer for a lump-sum payment that is typically higher than the cash surrender value but less than the full death benefit. For many seniors, retirees, or individuals facing health changes, this can unlock meaningful capital that would otherwise remain tied up in an unused policy. At Diversified Insurance Brokers, we guide you through the entire process, compare multiple licensed buyers, explain alternatives, and help you decide whether selling is the right move for your financial goals.

A life settlement works by transferring ownership of your policy to a licensed buyer. After the sale, the buyer becomes responsible for paying future premiums and will ultimately receive the death benefit when the insured passes away. In exchange, you receive immediate cash that can be used for retirement income, long-term care expenses, debt elimination, medical bills, charitable giving, or simply improving quality of life. Many policyowners originally purchased coverage decades ago when children were young or business obligations were higher. Today, those same policies may no longer serve the original purpose — yet premiums continue. Instead of surrendering the policy back to the insurance carrier for minimal value, a life settlement may provide significantly more.

Most sellers are age 65 or older, though younger individuals with serious health changes may also qualify. Policies that commonly qualify include universal life, whole life, variable universal life, and convertible term policies. Face amounts are often $100,000 or higher, with larger policies typically attracting stronger offers. Buyers evaluate several factors, including age, health history, premium requirements, policy design, and carrier financial strength. If premiums are high relative to the death benefit, that may reduce value — but it does not automatically disqualify a policy. Every case is different, which is why a professional review matters.

The process begins with a policy review. We gather your in-force illustration, confirm the face amount, review premium structure, and analyze any riders. Next comes a health assessment. Buyers generally request medical records (with your written authorization) to estimate life expectancy. We then market the policy to multiple licensed institutional buyers. As an independent brokerage, we do not rely on a single funding source. Instead, we solicit competitive bids and negotiate on your behalf. Offers are presented clearly, showing gross offer amount, fees (if applicable), and escrow terms. If you accept an offer, documents are executed and funds are placed into escrow. Once ownership transfer is confirmed by the insurance carrier, escrow releases payment directly to you.

What determines how much you receive? Age and health are primary drivers — generally, shorter life expectancy increases buyer interest. Policy structure also matters. For example, permanent policies with stable premium structures are often attractive. Carrier ratings can influence bids, as buyers consider long-term claims-paying ability. Premium load is another major factor: lower required premiums relative to death benefit typically improve economics and can increase settlement value. Because multiple variables affect pricing, it is essential to compare more than one offer.

It’s also important to understand trade-offs. Once sold, your heirs will no longer receive the death benefit. There may be tax consequences depending on your cost basis and gain. Medical records are required for underwriting review. State regulations apply, and cooling-off periods vary. This is why we walk clients through every detail before any decision is finalized.

Before selling, you should also explore alternatives. In some situations, reducing the face amount may lower premiums while preserving partial coverage. If your policy has cash value, loans or withdrawals may provide liquidity without forfeiting the death benefit. Certain policies include accelerated death benefit riders that allow early access under qualifying health conditions. A 1035 exchange may allow repositioning coverage into a more suitable policy or certain annuity structures, subject to tax guidance. We outline each option so you can weigh short-term needs against long-term legacy goals.

For individuals evaluating broader planning needs, you may also consider reviewing whole life insurance with cash value growth if maintaining permanent coverage is still a priority. Seniors sometimes compare settlement proceeds against alternatives like fixed indexed annuities to generate income. Others reassess coverage needs altogether by reviewing how much life insurance do I need to determine whether keeping partial protection makes sense.

Consider a real-world example: A 78-year-old policyowner held a $500,000 universal life policy with annual premiums of $9,000. The cash surrender value was only $18,000. After competitive marketing to multiple buyers, the policy received a $120,000 offer — more than twelve times the surrender value — while eliminating future premium obligations. Every case is unique, but this illustrates how secondary market competition can materially increase value compared to surrendering directly to the carrier.

Life settlements are regulated at the state level, and we follow all licensing and compliance requirements. We use secure, HIPAA-compliant processes to protect your privacy. Tax treatment varies based on cost basis and gain; consultation with a qualified tax professional is recommended. Our role is to advocate for you — not the buyer — and ensure you fully understand every financial implication before proceeding.

Diversified Insurance Brokers is an independent, family-owned agency representing more than 100 carriers and a broad network of licensed settlement providers. That independence matters. Instead of steering you toward a predetermined outcome, we compare solutions objectively. If selling your policy makes sense, we help maximize value. If keeping or restructuring coverage is better, we explain why. Our priority is aligning your insurance assets with your current financial reality — not the circumstances that existed when the policy was originally purchased.

If you are wondering whether now is the right time to sell, the best first step is a no-cost evaluation. There is no obligation, and no commitment to proceed. Simply gather your latest policy statement or in-force ledger and reach out. We will handle the rest, present transparent options, and help you move forward with clarity.