Pros & Cons to Selling Life Insurance Policy

Looking to get cash for your life insurance policy? Get a free quote now and sell your policy for a lump sum payment. No more premiums or waiting for death benefits. 

Are you tired of paying premiums on your life insurance policy without any immediate financial benefit? Or maybe your financial circumstances have changed, and you no longer need the coverage that your policy provides. Whatever your reason may be, selling your life insurance policy can be a smart financial move. By selling your policy, you can receive a lump sum payment that you can use to cover expenses, pay off debts, or invest in your future. 

If you're looking to sell your life insurance policy, there are several companies that can help you navigate the process. No matter where you might sell your policy, the process of doing so will generally have the following steps:

  1. Application: Most companies will require you to fill out an application to begin the process or even get a quote.
  2. Documentation: All the necessary documentation on your policy will need to be collected for the company looking to purchase your policy.
  3. Appraisal: Underwriters for the company will determine the value of your policy based on a number of factors.
  4. Offer: If the company is interested in purchasing your policy they will extend an offer. Comparing offers from multiple companies is the best method to ensure you are getting a good deal.
  5. Closing: Assuming you accept the offer, the company will send you closing documentation to sign to complete the deal.

American Life Fund

American Life Fund is a company that prides itself on offering high offers with quick turnaround times. Depending on the state, the policyholder must have owned their current life insurance policy for 2-5 years, and it must have a face-value of at least $100,000. While brokers can act as a kind of middle-man when it comes to the process of selling your life insurance policy, there are downsides to going with a broker. All brokers charge certain fees and commissions for their services, which inevitably end up coming out of your settlement money, meaning less money for you. At American Life Fund, they offer an individually-tailored experience to make the process of trading in your life insurance policy for a viatical settlement as easy and stress-free as possible.

Pacific Life

Pacific Life, on the other hand, is a mutual holding company that specializes in variable universal life insurance. They have an AM Best financial strength rating of A+ and provide competitive pricing and reliable illustrations for most of their policies that can maximize cash value accumulation. Pacific Life has shown good performance of its investments that fuel customers' cash value growth, making them a good option if you have a variable universal life insurance policy.

Life Settlement Option

Life Settlement Option is a broker solution that helps you understand if your policy qualifies for a life settlement and provides an initial valuation or appraisal. If your expectations are in line with this appraisal, they can talk about the steps necessary to bring your case to market. There is no cost for an appraisal, and it’s free to test the market as well. Their job is to bring your case to a wide variety of investors and create competition so that they find the most motivated buyer, at which point you can decide to accept or decline.


OVID is a life settlement provider that aims to make the process accessible to consumers. They offer an average payout of 22% of the policy face amount, which is calculated based on various factors including age, health, premium costs, and policy death benefit. The life settlement process can take around 3-8 weeks and Ovid refers qualified policies to licensed buyers who will evaluate your case and potentially make an offer for your policy. Once an offer is made and accepted, ownership and beneficiary of the life insurance policy are transferred to the buyer, who funds the settlement offer to an escrow account. The purchase price is then released to the policyholder upon confirmation of the change of ownership and beneficiary by the insurance company.

Harbor Life Settlement

On the other hand, Harbor Life Settlement is another provider that can guide you through the life settlement process. They will verify your eligibility, provide you with a free cash estimate, and handle all the work to make things as easy as possible for you. Policyholders who sell their life insurance policies could receive anywhere between 10% to 35% of the amount that would be paid when they die, with an average upfront cash settlement of 20% of their policy's death benefit. The process can take anywhere from two to four months, and the profit is taxable. Investors who buy policies on the secondary market are usually looking for sellers over age 65 and have limited life expectancies.

Whether you go with American Life Fund, Pacific Life, or Life Settlement Option, OVID, or Harbor Life Settlement it's important to weigh your options and choose the best fit for your needs. Be sure to ask about fees, turnaround times, and any other factors that may impact your decision. With the right company by your side, you can sell your life insurance policy with confidence and get the financial support you need.