Selling your Federal Employee Group Life Insurance (FEGLI) policy is a financial option that can provide a lump-sum cash payout in as little as 2 weeks. If you are a current or former federal employee with aFEGLI policy, and meet basic eligibility requirements, you may be able to convert that policy into immediate funds — up to 70% of the face value, depending on age and health.
Here’s exactly how to do it:
Step-by-Step: How to Sell Your FEGLI Policy
Step 1: Submit a Request Form
Start by submitting our short form online. This initiates the process and asks for key details:
- Face value (must be $150,000 or higher)
- Your age and general health
Providing complete and accurate information allows for a fast and accurate eligibility review.
Read an in-depth explanation of our eligibility requirements.
Step 2: Policy Review and Qualification Call
A licensed representative will contact you to confirm the details and ask follow-up questions. The review includes:
- Verification of your FEGLI coverage and ownership
- Assessment of current health status
- Employment history and policy duration
The goal is to determine your eligibility and prepare your case for evaluation.
See what your policy is worth — no cost, no obligation.
Step 3: Receive a Cash Offer
Once your policy and background have been evaluated, you’ll receive a written cash offer. This is a lump sum that you are free to use as needed, such as:
- Paying for out-of-pocket medical expenses
- Covering assisted living or in-home care
- Settling debts or mortgage balances
- Supporting a spouse, dependents, or family members
- Funding retirement plans or a savings cushion
There are no restrictions on how you use the payout. Once the offer is accepted, you no longer need to pay premiums.
Step 4: Assign Policy Ownership
If you choose to accept the offer, you’ll sign documents transferring policy ownership to a licensed third party. This includes:
- Policy assignment and release forms
- Confirmation from the insurer and personnel management
- Resolution of any outstanding requirements or documentation
This assignment ends your premium obligations and finalizes the agreement.
Step 5: Receive Your Funds
Once the insurer and Office of Personnel Management approve the assignment, the payment is issued. Most clients receive their lump sum quickly after all processes have been formalized and notarized.
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Eligibility Criteria for Selling a FEGLI Policy
To qualify for a life or viatical settlement through American Life Fund, the following conditions typically apply:
- Policy Type: You must own a Federal Employee Group Life Insurance (FEGLI) policy.
- Face Value: Your policy must have a minimum face value of $150,000.
- Age and Health: You must be 75 or older, or you must be diagnosed with a serious illness, such as cancer, ALS, or another qualifying condition.
- Policy Age: The policy should be active for at least two years before selling.
If you’re unsure whether your coverage qualifies, a short review can help determine eligibility without obligation.
What is FEGLI Coverage?
Federal Employee Group Life Insurance is employer-sponsored group life insurance provided through the U.S. government. The Office of Personnel Management administers the program.
FEGLI policies typically consist of Basic coverage and optional additional layers. Policyholders pay premiums via payroll deductions or direct billing. Over time, this group life insurance coverage can represent a significant value — often hundreds of thousands of dollars — but many are unaware that it can be converted into immediate funds.
Why Sell a FEGLI Policy?
For many current and former federal employees, group life insurance was originally purchased to protect loved ones in the future. But as life changes, so can your priorities. If your coverage no longer serves its original purpose — or you’re facing immediate financial needs — selling your FEGLI policy may be the most practical and empowering choice you can make.
Here’s why more federal retirees and seriously ill policyholders are choosing to convert their life insurance into a living asset:
1. Immediate Access to Significant Cash
Instead of waiting for a death benefit that may not align with your current needs, a sale gives you direct access to tens — or even hundreds — of thousands of dollars, depending on the size of your policy. These funds can be used immediately, with no restrictions.
Common uses include:
- Paying off high-interest debt
- Covering long-term care or home health support
- Supporting family during critical life transitions
- Creating financial breathing room during retirement
2. Relief From Ongoing Premium Payments
As premiums increase with age, many find that keeping FEGLI coverage becomes burdensome — especially when income is fixed. By selling your policy, you eliminate future premium payments altogether while still extracting value from the asset you’ve funded for years.
3. Keep Control While You’re Still Living
Life insurance is often thought of as a legacy tool. But if you’re in a stage of life where liquidity matters more than legacy, selling allows you to redirect that value toward your current goals.
Rather than leaving unused benefits on the table or surrendering the policy with no return, a sale ensures your policy works for you while you’re alive.
4. An Option for Those Who Feel Stuck
For many, the FEGLI program doesn’t offer traditional policy loans or cash value options. And unlike private whole life policies, FEGLI can’t be tapped for funds unless sold. If you’ve been told your policy “has no value unless you pass away,” this is no longer true. A life or viatical settlement creates an opportunity to utilize money from your life insurance policy now.
5. No Hidden Costs, No Obligation
There is no cost to explore your options. Requesting a policy review and receiving an offer does not lock you into a decision. You remain in control every step of the way, and you can choose to walk away at any point before signing.
Get your personalized cash offer — Read testimonials from our very satisfied customers.
A Final Thought
Most people think of life insurance as something you leave behind. But what if it could be something you use — to take care of yourself and to invest in peace of mind.
Selling your Federal Employee Group Life Insurance policy isn’t about giving something up. It’s about reclaiming value you’ve paid into, and using it in a way that fits the life you have now — not just the one you planned for decades ago.
Ready to take the next step? Contact American Life Fund today and find out how much your FEGLI policy is worth!
Frequently Asked Questions
Can I sell my FEGLI policy if it includes optional coverage or multiple parts?
Yes. FEGLI policies often include Basic and Option B coverage. In many cases, the Option B portion (which increases with salary or multiple levels) can be sold separately or in full. Your eligibility will depend on the total face value and whether the coverage is active and assignable.
Will my federal benefits or pension be affected if I sell my FEGLI policy?
No. Selling your FEGLI policy does not impact your federal retirement benefits, pension payments, or other entitlements. The life insurance policy is a separate asset and the transaction does not alter your government employment status or benefits.
Who buys the policy, and what do they get?
Your policy is purchased by a licensed third party — often a financial institution or investment group — who becomes the new owner and beneficiary. They take on the cost of future premiums and receive the death benefit later. You receive the negotiated lump sum now and are no longer responsible for the policy.
How soon can I receive my payout after accepting the offer?
American Life Fund’s goal is to complete most transactions as soon as possible. Obtaining the individual’s medical records is one factor that may hold the process up. If the individual provides their most updated medical records from the last two years as well as a copy of the insurance policy at the time of applying, this will greatly speed up the process. Once the closing documents are signed and notarized by the insured and the change forms have been processed by the insurance carrier, funding can be released to the seller in as little as two weeks.
What types of health conditions are considered for viatical eligibility?
Common qualifying conditions include cancer, ALS, advanced heart disease, Alzheimer’s, COPD, and other chronic or terminal illnesses. Each case is individually reviewed to ensure fair and prompt qualification.
Is the money I receive from selling my policy flexible in how I can use it?
Yes. There are no restrictions on how you use your lump sum payment. Many people choose to pay off debt, cover medical care, assist family, or invest in their quality of life during retirement.
