Can I Sell My Term Life Insurance Policy For Cash?

If you own a life insurance policy and need cash, you may be able to sell it for cash on the secondary market. Selling your life insurance policy is typically done through a life settlement broker, who will help you find a buyer for your policy. The amount you receive for your policy will depend on several factors, including the death benefit, policy type, age, medical records, and lifestyle.

What Types of Life Insurance Policies Can Be Sold?

Almost any life policy can be sold, but a few exceptions exist. Whole life insurance policies and term life insurance policies are the most common types sold. Universal life, indexed universal life, and variable universal life policies can also be sold. However, a few types of life insurance cannot be sold, including group life insurance and government-issued and employer-provided life insurance.

What Are the Reasons to Sell a Life Insurance Policy?

The most common reason to sell a life insurance policy is that the policyholder needs money. They may have lost their job, been hit with unexpected medical bills, or faced foreclosure. Another reason people sell their life insurance policies is because they no longer need the coverage. This could be because they have retired, their children are grown, or they have other assets to cover their expenses. Whatever the reason, they do not need the death benefit and would rather have the cash now.

What Is the Process of Selling a Life Insurance Policy?

The process of selling a life policy is fairly simple and is called a life settlement or viatical settlement. You will first need to find a buyer or broker interested in purchasing your policy. You can find buyers through online marketplaces (like The Annuity Expert) or by contacting life settlement companies directly. Once you have found a life settlements buyer, you will need to complete some paperwork and sign over the ownership of your policy. The buyer will then make a lump sum payment to you as specified in the contract and continue to pay the future premium payments to the insurance company.

What Are the Downsides of Selling a Life Insurance Policy?

The main downside of selling your life insurance policy is that you will no longer have coverage. In addition, if you die after selling your policy, your beneficiaries will not receive any money from the policy. You should also be aware that some life policies have a clause that prevents you from selling the policy. Before selling your policy to a viatical settlement company, read the terms and conditions carefully.


Selling your life insurance policy can be a great way to get extra cash, but it’s important to weigh the pros and cons before doing so. Make sure you understand all the terms of the sale, and choose a reputable buyer who is willing to pay a fair price for your policy.

Pros Cons
Get cash when you need it You no longer have coverage
You don’t need to keep paying premiums Your beneficiaries won’t receive any money from the policy if you die
You can use the cash for any purpose Some policies have a clause that prevents you from selling the policy
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