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Texas Department of Insurance
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Can I sell my life insurance policy?

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A life insurance policy, whether it’s a term life or whole life policy, is your personal property. You can sell it just as you would anything else you own, but there are some things to consider.

Life insurance policy with calculator, glasses and pen
  1. Life settlement companies must be licensed

    Companies that buy life insurance policies are called life settlement companies. They must be licensed with the Texas Department of Insurance. As with any financial transaction, beware of scams. Check a company’s license by calling 800-252-3439.

  2. Price based on age, health, and policy value

    Life settlement companies are mainly interested in buying high-value policies from older policyholders. You’ll probably need to have at least a $100,000 life insurance policy and be over the age of 65 to sell your policy. Life settlement companies will pay more if you have a health condition that leads to a lower life expectancy.

  3. No premiums or death benefit

    The life settlement company will take over your policy and pay the premiums. You won’t have to make more payments, but your family won’t get the life insurance benefits.

  4. Offers vary

    Check offers from different life settlement companies before you decide to sell.

    • You might have to pay taxes on the money you get from the sale.
    • The money from the sale could disqualify you from getting Medicaid and other public assistance.
    • The money might not be exempt from creditors.
  5. Other ways to get cash from a life policy

    • If your policy has built up a cash value, you can withdraw money or take a loan on the policy.
    • If it has a cash surrender value, you can stop the policy and get the money built up in the cash value. However, there may be charges for surrendering early.
    • A policy with an accelerated death benefit will prepay part or all the death benefit before you die. You still must meet the requirements in the policy, such as having a terminal illness, specified disease, or long-term illness.

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Last updated: 6/30/2022