Life insurance needs change over time. A policy that once played a critical role in protecting family or estate goals may no longer serve the same purpose later in life. For many individuals and retirees, rising premiums, changing financial priorities, or shifting estate plans can turn a once-valuable policy into a financial burden.
In these situations, a life settlement may offer an alternative to surrendering or lapsing a life insurance policy — allowing policyowners to unlock market value instead of walking away from coverage with little or no return.
Life settlements are most commonly explored when a policy is no longer aligned with current needs. Common reasons include:
As policies age, premiums on permanent life insurance — especially universal life policies — can increase significantly. Fixed income retirees may find ongoing payments increasingly difficult to justify.
Children may be financially independent, debts paid off, or estate tax exposure reduced. In these cases, the death benefit may no longer be essential.
Proceeds from a life settlement may be used to support:
Changes in health can materially affect a policy’s market value — even if the policy itself has not changed.
While each case is evaluated individually, life settlements typically involve:
Term policies may also qualify in limited circumstances, particularly if convertible.
Many policyowners default to surrendering a policy when they no longer want it. However, surrender value does not reflect the potential market value of a policy.
In some cases, a life settlement can result in a payout significantly higher than surrender value, providing liquidity that would otherwise be lost.
This is why a policy review is often the most important first step — even if a settlement ultimately isn’t pursued.
A life settlement is a permanent decision and should be evaluated carefully. Individuals should consider:
Working with an experienced advisor helps ensure the decision aligns with broader financial goals.
Life settlement proceeds may be taxed based on:
Proceeds can include a combination of return of basis, ordinary income, and capital gains. Because tax treatment varies, individuals should consult with a qualified tax professional.
At Living Equity Group, we help individuals understand their options before making irreversible decisions.
Our process includes:
Our goal is not to recommend a settlement — it’s to determine whether it makes sense.
If you are considering surrendering a policy, struggling with premiums, or simply unsure whether your coverage still fits your plan, a review can provide clarity.
Not sure if your policy qualifies for a life settlement?
We can review your policy and help determine whether selling, restructuring, or keeping it is the best path forward.
→ Request a Policy Review
