Looking for companies that buy existing life insurance policies? Look no further.

We’re going to walk you through everything you need to know about who buys insurance policies, selling your life insurance policy, and what kind of companies buy existing life insurance policies.

Blog feature image with an american life fund agent writing on a piece of paper and a caption that says life insurance policies

Can A Company Buy My Life Insurance Policy?

Yes! Because your life insurance policy is considered an asset that you own, you have the option to sell it.

There are two main ways of selling your life insurance policy: life settlements and viatical settlements.

With both life settlements and viatical settlements, you sell your existing life insurance policy to a third-party buyer in exchange for a lump-sum cash payout. The buyer then takes over the responsibility of paying the premiums on the policy. In return, they become entitled to the policy’s death benefit.

While the process of selling your life insurance through a life or viatical settlement is largely the same, there are also some key differences.

Take a look at the convenient infographic below to learn more about the differences and similarities between selling your life insurance through a life settlement and selling it through a viatical settlement.

Life Settlements Viatical Settlements
  • For healthy seniors, age 65 or older, looking to cash out on their life insurance policies now.
  • Eligibility requirements include: policy age, policy minimum, etc.
  • Payout is typically more than the cash surrender value of the policy, but less than the death benefit.
  • The exact figures will depend on your broker and the buyer.
  • Life settlements are considered income.
  • Life settlements ARE taxable.
  • Less financial freedom
  • Designed specifically for policyholders who have any of the following, and are looking to cash out on their life insurance policies now:
    • Life-threatening illness
    • Reduced life expectancy
    • Chronic health issues
  • There are certain additional eligibility requirements, including: policy age, policy minimum, etc.
  • Payout is typically more than the cash surrender value of the policy, but less than the death benefit.
  • Payout is typically 50-70% of the policy’s face value.
  • Viatical settlements are TAX-FREE and non-regulated.
  • More financial freedom

Will I Qualify to Sell my Policy?

There are many different reasons a person may choose to sell their life insurance policy. Whether you have a financial emergency, need more money for retirement, don’t want to keep up the premiums, or simply just want cash now, you may qualify to sell your life insurance policy through either a life settlement or viatical settlement.

Here at American Life Fund, we are committed to delivering high-quality service and providing fair, generous viatical settlement offers to clients like you.

We are a viatical settlement company that specializes in working with patients who have been diagnosed and are living with a serious illness, which means that we are experts when it comes to managing cases with care and compassion.

Because we believe you deserve cash now, we are committed to high offers with quick turnaround times.

If you’re interested in seeing if you qualify for a viatical settlement, fill out your quick free form and get in touch with us!

Qualifying For a Life Settlement

Life settlements are for otherwise healthy seniors, age 65 or older, who are looking to cash out on their life insurance policy early.

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 $150,000.

Qualifying for a Viatical Settlement

As we mentioned earlier, in order to qualify for a viatical settlement, you must have been diagnosed with a life-threatening illness. Unlike with life settlements, there are no age requirements to qualify for a viatical settlement.

You’ll also need to have held your current life insurance policy for 2 or more years, and your policy will need to have a face-value minimum of $150,000. Almost all policy types are eligible to sell. Whether you have whole life, term life, universal, group, or joint life insurance, you could be eligible for a viatical settlement.

If you meet these criteria, there’s a good chance you may be able to cash in your life insurance policy for a generous viatical settlement.

Want to see if you qualify for a viatical settlement? Visit us at American Life Fund.

Types Of Companies That Buy Life Insurance Policies

Who buys life insurance policies? The two main types of companies that buy life insurance policies are life settlement and viatical settlement companies.

Life & Viatical Settlement Brokers

Essentially, brokers act as a kind of middle-man when it comes to the process of selling your life insurance policy, either through a life or viatical settlement.

More specifically, you are basically hiring the broker to market your life insurance policy to the provider or company who will decide whether or not to purchase it.

The downside of going with a broker when selling your life insurance is that all brokers charge certain fees and commissions for their services—and those fees inevitably end up coming out of your settlement money, meaning less money for you.

Life & Viatical Settlement Providers

Unlike brokers, life and viatical settlement providers work directly with policy owners like you. Because providers don’t rely on brokers working as middle-men, you don’t have to worry about paying any hefty brokerage fees or commissions—which means more money for YOU.

At American Life Fund, through our individually-tailored experience, we make the process of trading in your life insurance policy for a viatical settlement as easy and stress-free as possible. Unlike brokers, we work directly with clients like you, to ensure you receive only the best quality offer for your policy.

Licensing Requirements For Companies Buying Life Insurance Policies

In order for a provider or company to buy life insurance, they must be certified as a licensed insurance professional for a minimum of 1 year. Some states also require certain training courses be taken as well.

What Type of Company Should I Sell my Life Insurance Policy to?

The choice of whether to sell your life insurance to a life settlement or a viatical settlement company depends largely on whether or not you meet the criteria and eligibility requirements for that specific type of settlement.

If you’re a healthy senior, aged 65 or older, a life settlement company would be the way to go. However, if you are currently living with a life-threatening illness, a viatical settlement company is likely more appropriate for you.

Frequently Asked Questions About Companies That Buy Existing Life Insurance Policies

How do I Sell an Existing Life Insurance Policy?

Start by finding a qualified company or broker. Once you’ve reached out with the intent to sell your policy, you’ll go through a verification process, review your offer, and complete the necessary paperwork. As the viator (seller) of your policy, you will receive a lump-sum cash payout.

How Much do You Get For Selling Term Life Insurance Policy?

If you elect to sell your term life insurance through a viatical settlement, you can expect to receive about 50-70% of the policy’s face-value.

Can I Cash Out my Term Life Insurance?

You cannot specifically “cash out” term life insurance, because it does not have a cash value—only permanent life insurance policies carry a cash value. However, with term life insurance you may still qualify to receive a cash payout through a viatical settlement, assuming you meet the other criteria for viaticals.

You can see if you qualify for a viatical settlement by filling out our quick, free form here.

Is it Legal to Sell Your Life Insurance Policy?

Yes, it is absolutely legal to sell your life insurance policy through a life settlement or a viatical settlement to life insurance settlement companies.

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About the Author: Lacey

Lacey is a compassionate and dedicated marketing director at American Life Fund, a leading life and viatical settlement company. Lacey has made it her mission to help patients with life-threatening illnesses and their families get the financial support they need during difficult times.

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