Valuation
How Much Is My Life Insurance Policy Worth?
The short answer: significantly more than your insurance company will offer. On average, life settlement payouts are 4 times the cash surrender value. Here's what determines your policy's value.
What Determines Your Policy's Value?
Age of the Insured
High ImpactThe older the insured, the higher the life settlement offer. Buyers price offers based on life expectancy — a policy held by a 78-year-old will typically command a larger offer than one held by a 65-year-old with similar health.
Health Status
High ImpactCounterintuitively, a decline in health since the policy was issued can increase your policy's value. Buyers are looking at how long they'll need to pay premiums before collecting the death benefit.
Face Value (Death Benefit)
High ImpactThe death benefit is the foundation of your policy's value. A $500,000 policy has a much larger potential payout in the secondary market than a $100,000 policy.
Annual Premium Amount
Moderate ImpactBuyers factor in the ongoing premiums they'll need to pay to keep the policy in force. Lower premiums relative to the death benefit mean a higher net value to the buyer — and a higher offer to you.
Policy Type
Moderate ImpactUniversal life and whole life policies are most common in life settlements. The specific terms of your policy — including any riders or conversion options — also affect valuation.
Current Cash Surrender Value
Lower ImpactWhile your insurance company's cash surrender value is a reference point, life settlement buyers typically offer significantly more. The CSV is really just the floor, not the ceiling.
Industry Average
4×
On average, life settlement payouts are four times more than the cash surrender value offered by your insurance company.
Based on industry data. Individual results vary based on policy and health factors.
Example Scenarios
These are illustrative examples to give you a sense of the range. Your actual offer depends on your specific situation.
| Policy Face Value | Age / Health | Est. Cash Surrender | Est. Life Settlement |
|---|---|---|---|
| $250,000 | 72 / Good | $12,000 | $35,000 – $60,000 |
| $500,000 | 76 / Fair | $28,000 | $90,000 – $160,000 |
| $1,000,000 | 79 / Good | $55,000 | $200,000 – $380,000 |
| $2,000,000 | 74 / Poor | $140,000 | $600,000 – $1,100,000 |
Illustrative estimates only. Actual offers depend on underwriting, premium levels, policy type, and buyer demand. Past offers are not a guarantee of future results.
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