How do you sell a life insurance policy?

Life insurance policies build equity every time a premium is paid as more and more money becomes invested in that asset. The policy, and the equity built in it, is personal property, and therefore it can be sold if the owner of that property no longer needs it or believes they can better utilize those dollars. When someone sells all or a portion of their life insurance, they sell it for a lump sum amount more than they would have received if they surrendered it back to the life insurance company (in many cases, four times the amount), but less than the full death benefit amount. This is not a loan, but rather a one-time cash transaction, and the funds belong to the individual who sold their policy. Ownership of the policy, including premium obligations and beneficiary rights, is then transferred to an institutional investment fund, which eventually collects the death benefit.

Abacus Life functions as a leader in this secondary market for life insurance. Our prime mission: work to help you understand your options. If you decide selling all or a portion of your policy is right for you, we can offer to purchase it from you for fair market value. We will provide all the numbers and details to show you how we determined its value and our offer, and if you decide to accept our offer we will provide you a lump sum amount and then take on all future obligations for the policy, including premium payments.

How many different options are there?

For the most part, there are three options for a life insurance policy:


is to sell your full life insurance policy for a cash amount above the policy’s surrender value. You have no further obligations or claims to the policy, with all future premiums paid by the buyer.

Retained Benefit

option means you would no longer pay any premiums and retain a portion of your benefit. Beneficiaries will receive a guaranteed percentage when the policy ends, but you have no further obligations or payments to make.


option is a combination of two, where you would sell a portion of your life insurance policy. With this option, you receive a cash payment now and your beneficiary receives a guaranteed percentage of the benefit when the policy ends, and you have no further obligation to pay future premiums.

How much is my policy worth?

Each case is specific, and there is no one-size-fits-all answer. We handle each case individually and with utmost confidentiality and sensitivity, as understanding your options will require knowledge of personal details like health status, age, policy type, and goals for the future. While there are a few factors that can help you determine the likelihood your policy has a high cash value, including being over the age of 65 (although there are options available for younger clients who are facing a serious or terminal illness) and if you own a universal, whole, term or group policy, we recommend you contact us to learn more about your options and the potential value of your existing policy.

Success Story

William, 82, and his family decided that a policy was no longer needed for their estate plan and considered surrendering it to the insurance policy for a low payback. The policy beneficiary was William’s daughter, Amy, who decided to explore a better option: selling the policy to Abacus. With William’s age and medical history, Abacus nearly doubled the cash surrender amount the insurance company was offering, return $1.2 million back to his family. Amy and her siblings are using the funds to ensure William has excellent care during this portion of his life.