5 Qualifications for Selling Your Life Insurance Policy

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While selling your life insurance policy through a life settlement can be straightforward, not all policies and policyholders are eligible. Here are the five primary qualifications that life settlement providers evaluate.

Qualification #1: Policyholder Age

In the majority of cases, an individual must be 65 or older to qualify for a life settlement. Younger policyholders may be eligible if they have certain serious medical conditions that affect life expectancy.

Qualification #2: Policyholder Location

You must be a United States citizen and current U.S. resident. Life settlements are governed by state insurance regulations, which vary by state. Additionally, buyers require the ability to contact you periodically to confirm your health status — which impacts the value of the policy.

Qualification #3: Policy Size and Type

Your policy generally needs a death benefit of $100,000 or more to attract buyers. Policies below that threshold are difficult to place in the secondary market.

Eligible policy types include:

• Universal Life (UL)
• Survivorship Universal Life (SUL)
• Convertible Term Life
• Whole Life (WL)

As a general rule, larger policies owned by older individuals command the highest settlement values.

Qualification #4: Date of Policy Issue

The date your policy was issued matters. Most states require a policy to have been active for at least 25 months (and some require up to five years) before it can be sold via life settlement. This is a state-by-state requirement — Allan can confirm what applies in your situation.

Qualification #5: Insurance Carrier

The policy must have been issued by a U.S.-based insurance carrier with an A.M. Best Rating of B++ or better. Policies from carriers with lower ratings may not qualify, as institutional buyers require a minimum financial strength standard.

If you meet most of these criteria, there's a good chance your policy qualifies. The best way to know for certain is to call Allan directly — he'll give you an honest assessment within minutes, at no cost.