Thinking about canceling your life insurance? Ask one question first.
"What is my policy worth to someone else?"
When premiums rise or coverage is no longer needed, many people call the insurance company and surrender the policy for its cash value. Others stop paying and let it lapse. Many never learn that a regulated market exists for buying existing policies.
That option is called a life settlement: you sell your policy to a third party for a lump-sum payment. According to FINRA, the payment is generally more than the policy's cash surrender value and less than its net death benefit. The buyer takes over the premiums.1
In 2025, people who sold policies through LISA member providers received an average of $212,066. The average cash surrender value was $24,360.2 Your result will depend on your own age, health and policy.
Why policyowners call Trust Life Settlements
The best way to make sure is to shop around.
A broker who represents you can bring several buyers to the table.1
Get a free, confidential policy review.
No cost and no obligation. If you sell, our fee is paid from the proceeds at closing.
Thank you for reading this guide. If you're here, you may be facing a decision about a life insurance policy you've paid into for years.
Maybe the premiums have gone up. Maybe your children are grown, your mortgage is paid off or your estate plan has changed. Or maybe you simply need the money more today than your family will need the death benefit later.
Whatever the reason, you deserve to know all of your options before you make a choice you can't undo. Surrendering a policy or letting it lapse is final. Selling it may be worth much more, or it may not fit your situation at all. Either way, you should know before you decide.
I also believe you deserve clear, written answers about licensing, fees, agreement terms and your estimated net proceeds before you sign anything. That's why we publish our fee schedule. And it's why this guide asks you to look past the offer and compare what you keep.
Take your time. Share this with your family, your financial advisor or your accountant. When you're ready, we're here to answer your questions.
Sincerely,
Trust Life Settlements, LLC
What is a life settlement?
It's the sale of an existing life insurance policy to a third party for a lump-sum cash payment.
A lump sum
Cash at closing that you can use for anything: care, bills, retirement income or family.
Future premiums
You stop paying premiums. The buyer pays them from then on and receives the death benefit later.1
No longer receive it
Selling ends your family's claim to the death benefit, so it's worth talking it over together.
Is this legitimate?
Yes. The right to sell a policy goes back to 1911, when the U.S. Supreme Court held in Grigsby v. Russell that a valid policy can be assigned to someone without an insurable interest.3 Today the majority of states regulate life settlements.1
Where does the money come from?
Buyers are generally institutions that hold policies until maturity or resell them to other investors.1 They pay you now in exchange for the death benefit later.
How much will I get?
It depends on your age, health and policy terms.1 Settlements generally pay more than the cash surrender value and less than the death benefit. See what drives value.
Your options, side by side
If you no longer want a policy, you usually have more than one choice. Here's how the most common ones compare.
| Option | What happens | What you receive | Keep in mind |
|---|---|---|---|
| Keep the policy | You keep paying premiums. | Your beneficiaries receive the death benefit. | Premiums may keep rising, especially on some universal life policies. |
| Surrender it | You cancel and return the policy to the insurer. | The cash surrender value, if any. | Coverage ends. Surrender value is often far less than market value. |
| Let it lapse | You stop paying premiums. | Often nothing. | Coverage ends, and years of premiums may be lost. |
| Reduce coverage | Ask your insurer about a lower death benefit or a paid-up option. | Smaller coverage with lower or no premiums. | Not every policy offers this. Ask your insurer for the details. |
| Sell it (life settlement) | A buyer purchases the policy and pays the premiums. | A lump sum, generally more than surrender value.1 | Beneficiaries no longer receive the death benefit. Taxes and benefits may be affected.1 |
This comparison is general information. Your insurer can confirm the options in your specific policy.
When a life settlement may make sense
FINRA notes that a settlement might make sense if you no longer want or need your policy, or can no longer afford the premiums.1 Common situations include:
- Premiums have become hard to afford on a fixed income
- A spouse or beneficiary has passed away
- Your children are grown or your mortgage is paid off
- Your estate plan or business has changed
- You need money for care, medical costs or retirement
"Surrendering a policy or letting it lapse is final. Find out what it's worth first."— David Rodriguez, Managing Broker
Life settlements by the numbers
Each year, the Life Insurance Settlement Association (LISA) collects closing data from its licensed provider members. Here's what people who sold their policies received in 2025.2
Do I qualify? What's it worth?
If two or more of these describe you, a free review may be worthwhile.6
What determines your offer
A buyer estimates how long it may pay premiums before collecting the death benefit. FINRA notes the amount depends on your age, health and the policy's terms and conditions.1 In practice, buyers look at:
Age
Older insureds generally mean a shorter holding period for the buyer.
Health
Medical records shape the life expectancy estimate.
Premiums
Higher future premiums reduce what a buyer can pay today.
Policy terms
Type, death benefit, loans and cash value all matter.
Competition
Buyers value the same policy differently, so more bids can help.
Check your eligibility in about 60 seconds
Answer six questions online with no personal information required, or try our calculator for a quick estimate.6 Buyers set final criteria.
Don't just compare the offer. Compare what you keep.
An offer is the price a buyer will pay. What you actually take home is the offer minus broker compensation and other transaction costs. That's why FINRA tells consumers to ask how the person they're working with is being paid.1
Many brokers charge a percentage of the settlement, so their fee grows as your offer grows. We work differently. Trust Life Settlements publishes five flat-fee tiers based on your gross offer. The fee is a set dollar amount, capped at $60,000, and paid from the proceeds at closing. You never write a check.4
Questions to ask any broker
- How are you paid? Is it a percentage or a fixed amount?
- Do you receive any money from the buyer?
- Do you buy policies yourself or own a funding company?
- Will I see every offer and my estimated net proceeds in writing?
- Are you licensed in my state?
| If your gross offer is | Our flat fee |
|---|---|
| $0 – $100,000 | $6,000 |
| $100,001 – $250,000 | $15,000 |
| $250,001 – $500,000 | $30,000 |
| $500,001 – $750,000 | $45,000 |
| $750,001 and above | $60,000 max |
Tiers are based on the gross settlement offer, not your policy's face value. Net proceeds also reflect applicable transaction costs.4
One $360,000 offer, two ways to pay a broker
Step by step: what to expect
Every case is different, but most follow the same clear path. You can stop at any point before you sign a final agreement.5
Free conversation
A confidential call about your policy and goals. No obligation.
Policy review
We look at coverage, premiums, policy type, age and general health.
Case preparation
With your permission, we gather policy documents and medical records.
Buyers compete
Your case goes to multiple qualified institutional buyers.
You review offers
We show each gross offer, our fee, other costs and your estimated net. You decide.
Closing documents
If you accept, we coordinate the paperwork and guide you through signing.
You get paid
Funds are released to you, less the disclosed fee and applicable costs.
Typical timeline: 60–90 days
Many cases take about 60 to 90 days from application to funding.7 The biggest factor is how quickly medical records and insurer verifications come back.
You stay informed
Our secure client portal shows where your case stands, from submission to payout.9
A chance to change your mind
Many states give sellers a rescission period after closing to cancel the sale. Ask how long yours is.
Timelines are estimates and vary by policy, buyer and state law.
What to weigh before you sell
A life settlement isn't right for everyone. FINRA encourages people to proceed with care and to consider several trade-offs before selling.1 A good broker will help you think through each of them.
Your family's death benefit
After a sale, your beneficiaries won't receive the policy's death benefit. Talk it over with them first.
Taxes
The payment can be taxable depending on your circumstances.1 Ask your accountant or tax advisor before you accept an offer.
Public benefits
A lump sum may affect eligibility for programs such as Medicaid.1 An elder-law attorney can help if this applies to you.
Future coverage
The sold policy stays in force with the buyer, which may affect your ability to buy new coverage, and new coverage may cost more.1
Your privacy
Buyers need medical records to make an offer. FINRA suggests asking how your information is protected and who will see it.1
Costs and fees
Transaction costs can be high, so ask exactly how everyone is paid.1 Compare net proceeds, not just offers.
Bring your team into the conversation
Many families involve a financial advisor, accountant or attorney before selling. We're glad to talk with them, join a call or send them the details in writing.
Myths, facts and protecting yourself
Myth"My policy is only worth its cash value."
Fact: The cash surrender value is what the insurer pays to cancel. Buyers on the secondary market may pay more.1
Myth"Term life can never be sold."
Fact: A term policy may qualify if it can still be converted to permanent coverage.6
Myth"I have to be seriously ill."
Fact: Age, health and policy terms all matter. Many sellers are simply older and no longer need the coverage.6
Myth"I'll have to pay something upfront."
Fact: With Trust, there's no upfront cost. Our fee is paid from the proceeds only if a sale closes.4
Myth"If one company says no, that's final."
Fact: Buyers have different criteria. A policy one buyer passes on may interest another.6
A checklist before you sign
- Confirm the broker and buyer are licensed with your state insurance department, and check for complaints.1
- Ask who the broker represents and how they're paid.1
- Get every offer and your estimated net proceeds in writing.
- Ask how your medical information will be protected.1
- Ask whether the buyer will contact you later for health updates.
- Confirm your state's rescission period.
- Never feel rushed. Take time to talk with family and advisors.