Policy Valuation
How Much Is My Life Insurance Policy Worth?
A life insurance policy has up to three values: the death benefit your beneficiaries would receive, the cash surrender value your insurer offers, and the market value if you sell it. In 2025, the average sale brought nearly 9 times the surrender value (LISA; individual results vary). Here is how each value works.
The Three Values of Your Policy
If you searched "what is my life insurance policy worth," the answer depends on which value you mean. Every policy has up to three, and they can be very different numbers.
| The Value | What It Is | Where to Find It |
|---|---|---|
| Death benefit (face value) | What the policy pays your beneficiaries when the insured passes away. | The first page of your policy or any annual statement. |
| Cash surrender value | What your insurer pays you to cancel a permanent policy today. Typically a small fraction of the face value; term policies have none. | Your annual statement, or call your carrier and ask. |
| Market value (life settlement value) | What competing institutional buyers will pay for the policy: usually well above the surrender value and below the death benefit. | A licensed broker shops your policy to buyers and brings you the bids. |
If all you want is your cash surrender value, you do not need anyone's help: call your insurance company and ask, or read it off your annual statement. Our guide to cash surrender value explains how insurers calculate it and why it runs so low. The rest of this page covers the third value: what your policy is worth on the open market, and how buyers arrive at that number.
You can check your own policy's market value now, or keep reading to see how buyers build the number.
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How Much Is My Policy Worth If I Sell It?
Most policies that qualify sell for 10 to 25% of the face value, roughly 20% on average, according to industry data and LISA guidelines. The full observed range runs from about 10% to 50%, with the top of that range tied to shorter life expectancies. Surrendering, by contrast, typically returns only 3 to 5% of face value (industry data). Where your policy lands depends on the factors below.
The gap is not new: a 2013 London Business School study of more than 9,000 policies found sellers collectively received over 4 times what surrendering would have paid. For what moves an individual offer up or down, see our guide to the average life settlement offer.
LISA Industry Data
Nearly 9×
According to the Life Insurance Settlement Association, selling a policy pays several times more on average than surrendering it to the insurance company.
In 2025, sellers received an average of $212,066, nearly 9 times the $24,360 average surrender value.
Source: LISA 2025 Annual Market Data (lisa.org). Individual results vary based on policy type, age, and health factors.
How Buyers Calculate Your Policy's Value
Life settlement buyers are institutional investors, and they all price a policy the same basic way. Understanding it tells you more about your policy's worth than any online tool can.
1. They start with life expectancy
Buyers order independent life expectancy reports from specialized medical underwriters who review the insured's records. Institutional buyers typically require at least two independent reports per policy. This is why health matters so much: a shorter life expectancy means the buyer collects the death benefit sooner and pays fewer premiums along the way.
2. They project the costs against the payoff
The buyer adds up the premiums it expects to pay to keep your policy in force, then weighs them against the death benefit it will eventually collect. That future death benefit is discounted back to today's dollars at the return the buyer requires. What is left over is the room the buyer has to make you an offer.
3. Competition sets the final number
No two buyers run the same assumptions, so offers on the same policy routinely differ, sometimes by a lot. Competition between buyers is what pushes the final number toward the top of the range. That is why who represents you matters: a broker collects competing bids, while a single buyer only has to beat your surrender value.
An Illustrative Example
Picture a $300,000 universal life policy with a $9,000 annual premium. If independent underwriters estimate a life expectancy of about 8 years, a buyer expects to pay roughly $72,000 in premiums before collecting the $300,000 death benefit, and it discounts that payoff to today's dollars before bidding. Applying the typical 10 to 25% of face value range (industry data), offers on this policy would land between $30,000 and $75,000. This is an illustration of the math, not a quote, and individual results vary.
This is why a real valuation, sometimes called a policy appraisal, starts with your medical records and your insurer's in-force illustration (a projection of the policy's future premiums and values). An online tool like our life settlement calculator can tell you whether your policy is likely to qualify. Only competing bids can tell you what it is actually worth.
What Makes a Policy Worth More (or Less)?
Eight factors drive what buyers will pay. The first three matter most.
Age of the Insured
High ImpactThe older the insured, the higher the life settlement offer. Buyers price offers based on life expectancy. A policy insuring a 78-year-old will typically command a larger offer than one insuring a 65-year-old in 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 life expectancy: how long they will 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 on the open market than a $100,000 policy, and larger policies tend to attract more competing buyers.
Annual Premium Amount
Moderate ImpactBuyers factor in the ongoing premiums they will 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, and convertible term can qualify too. The specific terms of your policy, including any riders or conversion options, also affect valuation.
Current Cash Surrender Value
Lower ImpactYour insurance company's cash surrender value is a reference point and a floor: no one sells below it. Life settlement buyers typically offer significantly more, because they are pricing the policy itself, not canceling it.
Insurance Carrier Rating
Moderate ImpactBuyers need confidence the death benefit will eventually be paid, so the insurer's financial strength rating (AM Best, S&P, Moody's) affects buyer appetite. Some buyers will not bid on policies from lower-rated carriers, which can thin the competition for those policies.
Outstanding Policy Loans
Lower ImpactA loan against your policy reduces the net death benefit a buyer would eventually collect, so it lowers offers. A loan rarely disqualifies a policy by itself, but the balance is subtracted from what the policy is worth.
Wondering whether your policy clears the bar in the first place? Run through the life settlement qualification checklist.
Example Scenarios
These are illustrative examples to give you a sense of the range. The higher percentages reflect older insureds or those with meaningful health changes, not the typical case. Your actual offer depends on your specific situation.
| Policy Face Value | Age / Health | Est. Cash Surrender | Est. Life Settlement |
|---|---|---|---|
| $250,000 | 77 / Fair | $10,000 | $35,000 to $75,000 |
| $500,000 | 73 / Poor | $20,000 | $100,000 to $200,000 |
| $1,000,000 | 81 / Good | $45,000 | $150,000 to $250,000 |
| $2,000,000 | 86 / Fair | $80,000 | $600,000 to $1,000,000 |
Illustrative estimates only. Actual offers depend on underwriting, premium levels, policy type, and buyer demand. Individual results vary; there is no guarantee of an offer.
Many larger policies like these are held in a trust. A trustee can have a trust-owned or ILIT policy (an irrevocable life insurance trust) valued the same way, with the proceeds paid to the trust. If your policy is $1 million or more, see what a million-dollar policy is worth in a life settlement.
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Check Your Own Policy
Averages describe the market, not your policy. The estimate takes a few questions, and there is no medical exam.
LISA 2025 Annual Market Data: $212,066 average settlement vs. $24,360 average surrender. Individual results vary.
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Find Out What Your Policy Is Worth
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(321) 270-0279Does Policy Type Change What It's Worth?
Yes, mostly through the premiums and the cash value. Here is the value angle for the three most common types.
Universal life
The most frequently sold policy type in the life settlement market. Flexible premiums make universal life attractive to buyers, and many owners sell exactly because those premiums have climbed. A universal life policy can hold real market value even after its cash value has thinned.
Whole life
Whole life builds a guaranteed cash surrender value that can sit closer to the policy's market value than other types, so the gap between surrendering and selling can be narrower. Competing bids still frequently beat the surrender number, sometimes meaningfully. The practical move is to compare both numbers before deciding.
Term life
Term has no cash value, so your insurer pays nothing if you drop it. But a term policy with a conversion option has real market value: it is valued on the face amount and the insured's health, not on a surrender multiple. Deadlines matter here, so see our guide to selling a term life insurance policy before your conversion window closes.
For quick can-I-sell verdicts on every policy type, including indexed and variable universal life (IUL and VUL) and group coverage, see the policy-type guide.
Three Steps to Find Out Your Policy's Value
None of these steps commits you to selling.
- 1
Gather two documents
Find your most recent annual policy statement, then call your insurance company and request a current in-force illustration, a projection of the policy's future premiums and values. Your insurer provides both at no charge, and together they show your death benefit, premiums, and cash surrender value: the raw material of any real valuation.
- 2
Request an estimate
Answer a few questions about the policy and the insured's age and health, online or by phone. There is no medical exam and no cost at this step, and you will get a clear read on whether your policy is worth shopping to buyers.
- 3
Let a licensed broker shop it to competing buyers
A licensed life settlement broker represents you, the seller, and owes you a fiduciary duty. The broker takes your policy to multiple institutional buyers and collects competing bids, and every fee is disclosed in writing before you sign anything. You see the offers and decide.
If you decide the number is worth pursuing, here is how the full selling process works, step by step.
Policy Value Questions, Answered
How much is a $500,000 life insurance policy worth if I sell it?
Most qualifying policies sell for 10 to 25% of face value according to industry data, so a $500,000 policy in average health might bring roughly $50,000 to $125,000. Offers run higher when the insured's health has declined and life expectancy is shorter, which is why a poor-health case can reach well above that. Where you land depends on age, health, premium costs, and policy type. Individual results vary; the only way to know your number is to have buyers bid.
How do I find the cash value of my life insurance policy?
Check the most recent annual statement your insurance company mailed you, or call your carrier and ask for the current cash surrender value and an in-force illustration (a projection of your policy's future premiums and values). Your insurer provides both at no charge. Remember: the surrender value is only what your insurer pays to cancel the policy. It is the floor, not what the policy is worth on the open market.
Is a policy's market value always higher than its cash surrender value?
Usually, and often by a wide margin, but it is not guaranteed. Buyers bid on the policy's market value, which in 2025 averaged nearly 9 times the cash surrender value according to LISA. If keeping or surrendering your policy would genuinely serve you better, an honest broker will tell you so.
How is a life insurance policy's value calculated?
Institutional buyers order independent life expectancy reports based on the insured's medical records, then weigh the death benefit against the premiums they would pay to keep the policy in force. The shorter the life expectancy and the lower the premiums relative to the face value, the higher the offer. Competitive bidding between multiple buyers typically pushes the final number up.
How much is a term life insurance policy worth?
A term policy has no cash value, so surrendering it pays nothing. But if your term policy has a conversion option, it can have real market value in a life settlement. Converted term is valued on the face amount and the insured's health, not on a surrender multiple. Check your conversion deadline before letting a term policy lapse.
Why would poor health make my policy worth more?
Buyers price a policy on life expectancy. A decline in health since the policy was issued generally means the buyer pays premiums for fewer years before collecting the death benefit, so they can afford to offer you more today. It is one of the few financial situations where a health change works in your favor.
Is an old life insurance policy worth anything?
It can be. If the policy is still in force, its age does not reduce its market value, and an older insured usually means stronger offers. Some permanent policies even stay in force after premiums stop, carried by their own cash value. Locate the policy first, then find out what it is worth before you let it go.
Can I find out what my policy is worth without selling it?
Yes. An estimate tells you what your policy could bring on the market, with no obligation to sell. Many owners simply want the number while they decide between keeping, surrendering, or selling. Nothing moves forward unless you choose to.
Lost track of a policy you or a family member owned? Our free lost policy finder guide walks you through locating it. For everything else, see the full FAQ.
Check What Your Policy Is Worth
The estimate takes a few minutes, and there is no obligation. Want the bigger picture first? Read the complete guide to selling your life insurance policy or learn what a life settlement is.
Reviewed by Jeff Hallman, licensed life settlement broker at Citizens Life Group. Last reviewed July 10, 2026.
Sources
- Life Insurance Settlement Association (LISA), 2025 Annual Market Data (released May 19, 2026): average payout $212,066 vs. average cash surrender value $24,360 across 2,955 transactions.
- Naik, N., London Business School (2013): study of more than 9,000 settled policies finding sellers collectively received over 4 times the surrender value.
- National Association of Insurance Commissioners (NAIC): the Viatical Settlements Model Act, the model law behind state life settlement regulation.
This page is educational and is not financial, tax, or legal advice. Payout percentages and averages are market statistics, not offers, and individual results vary; there is no guarantee that every applicant receives an offer. Life settlement proceeds may be taxable in part and can affect eligibility for need-based programs such as Medicaid, so consult a licensed tax professional or benefits counselor before making decisions about your policy. Citizens Life Group does not provide tax advice. Last reviewed July 10, 2026.