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What Is Your Life Insurance Policy Worth?​

You’ve heard about the possibility of selling a life insurance policy you don’t need or can’t afford, and you’re thinking you could use the cash to pay medical or long-term care bills, or to invest in a more comfortable retirement. This transaction is known as a life settlement, or sometimes referred to as a life insurance buyout. But before you take the step of contacting a life settlement company, you’d like to get some idea of how much your life insurance policy is worth – and whether you’re even eligible to sell it. 

An online life settlement calculator can provide a quick general assessment of your eligibility to sell your life insurance policy and the potential value of a life settlement. However, you should be aware that quick online calculators cannot replace the in-depth medical underwriting process required to accurately estimate the value of that policy. Read on to learn more about the factors that influence life settlement valuation and see if you’re eligible to sell your life insurance.

Find Out How Much Your Policy Is Worth

What are the Eligibility Requirements
For a Life or Viatical Settlement?

Before you can determine how much your life insurance policy is worth, you need to determine whether you’re eligible to sell it at all. An online life settlement calculator will ask a few basic questions to determine if you qualify for a life or viatical settlement. In general, here are the eligibility requirements that help life settlement companies determine if they can (or will) buy out your life insurance policy:

Policyholder Age

In most cases, you must be 70 years old to qualify for a life settlement. Viatical settlements may be an option for younger policyholders if they have a chronic or terminal illness.

Policy Age

Each state has their own regulations on waiting periods (2-5 years) that determines how long you must own a life insurance policy before you can sell it through a life settlement.

Policy Value

The policy value of your life insurance will determine your eligibility. Most life settlement companies will not buy out a life insurance policy unless it has a face value of $50,000 or more. 

Policy Type

There are only a few types of life insurance policies that can be sold through a life settlement. The life insurance policies are whole, universal, variable, and convertible term policies.

 Life settlement calculators will ask you a series of basic questions (or ask you to fill out a form) in order to get an idea if you qualify, but to confirm eligibility you’ll need to submit medical records or a list of health care providers to the company you’re working with. 

Additionally, while eligibility related questions gather basic information for a broad estimate of the potential value of a life settlement you’d get — sell your life insurance policy calculators may also ask other questions to give you a more accurate valuation. If you use a quick life settlement calculator with only a handful of questions, it’s likely not accounting for several factors which means the estimate you’re getting is probably inaccurate.

    What Are All of the Factors for Calculating a Life Settlement Value?

Some life settlement calculators will give you an estimate solely based on the information collected from eligibility related questions. However, the value of a life settlement is tied to several other factors as well. To help you determine what your life insurance is worth, you should be aware of all the factors that affect life settlement valuation. Here is the comprehensive list of factors used in the life settlement valuation process.


The shorter your life expectancy, the more valuable your life insurance policy will be to a buyer, and gender makes a significant difference in that outlook. Data is used from reports from the Centers for Disease Control & Prevention shows that in 2018, the average life expectancy for U.S. males was 76.2 years, compared to 81.2 years for females. That continuing life expectancy gap tends to mean that, other factors being equal, life insurance policies covering men fetch higher values in the life settlements market.

Health Status

Your health condition is a factor sell your life insurance policy calculators use to help determine how much your policy is worth. This is because health status affects your life expectancy and, as you can probably guess, that number will be lower if you have serious health problems. It may seem odd to think of poor health as being a financial asset, but because life settlement buyers want to minimize the number of years they will have to pay a seller’s insurance premiums, the sicker you are, the more valuable your policy will be.


Beyond eligibility, your age also affects the value of a life settlement for your insurance policy. In most cases, the older you are, the more highly a life settlement investor will value your life insurance policy, and the estimate you receive from a life settlement calculator will reflect that fact. Your current age is one of the key variables in estimating your settlement, a gauge that buyers use to help determine how much they are willing to offer for your policy.   

Policy Size

Much like age, policy size is also considered for an eligibility factor, but beyond the base threshold that determines whether you can sell your policy— you’ll discover that policy size also impacts its value in the life settlements market. In general, a policy with a bigger death benefit will pay out a higher price since it means the life settlement company who purchased the policy will collect a larger sum upon the passing on the policyholder.

Premium Costs

Life settlement investors pay all future premiums until the policy matures upon the death of the person who is insured, they consider that expense when evaluating a policy’s worth.. They multiply the annual premium amount by the insured person’s estimated life expectancy in years. The longer the life expectancy, the more those premium costs add up, and the less buyers will be willing to pay for a policy.

Policy Loans

If you have an outstanding loan against your life insurance policy, prospective buyers will factor that into buying your policy and how much they will offer you for a buyout. That’s because, if you should pass away before paying off the loan, the amount you owe, including the principle balance and the interest will be deducted from the death benefit the company who purchased the life insurance policy. 

Policy Type

The type of life insurance policy you own makes a difference in a life settlement. The only life insurance polices that can be sold for a life settlement are whole, universal, variable, and convertible term policies. Not all eligible life insurance policies are worth the same. Many are surprised to find out that some policy types are worth more than others. A universal life policy will usually pay the highest price to the seller, but the other eligible policy types can still expect favorable results and a significant sum when selling through a life settlement.

Investor Discount Rate

A life expectancy estimate is not a certainty. Life settlement buyers can’t make a guaranteed projection of how much they will pay in premiums over the life of a policy. It’s difficult to make comparison between the potential returns of a life settlement purchase and the returns that might be possible from other investments. To account for uncertainties, investors apply a discount rate that affects the value of a life settlement for the seller. The higher the discount rate, the less money is offered for the policy. The lower the discount rate, the more money you will receive.

Life Insurance Issuer

Prospective buyers will also consider the financial stability of your life insurance issuer, because they want to be sure the company will be able to pay the death benefit claim when it comes due. They will look at how insurance industry rating agencies assess the company’s solvency, and the amount they bid will reflect how high that rating is. If the rating is too low, the life settlement provider might consider the policy too risky to bid on at all.

Buyer's Risk

The biggest risk to the buyer of your life insurance policy is that you will live a lot longer than expected. While experts can use actuarial tables and other tools to make general projections about the life expectancy of someone of your age, gender, health and lifestyle, they can’t make any guaranteed predictions of how long an individual person will live. A potential buyer’s assumes that risk with the value they put on your life settlement offer.

How Much Is My Policy Worth?

How Much Is Your Life Insurance Policy Worth?

As detailed in the sections above, there’s a lot of factors that affect whether your life insurance policy can be sold and how much it’s worth. Harbor Life Settlements doesn’t use a quick life settlement calculator that spits out an instant quote because these calculators tend to be inaccurate and misleading due to insufficient information.

Instead, we start with a simple online form and take a hands-on approach for personalized service and a more accurate estimate. Our experts will carefully review information from the form to determine your eligibility and then begin the underwriting process to calculate an accurate valuation of how much your policy is worth. You’ll receive a message from us letting you know we’re evaluating your policy, at which point you can also ask any questions you have about the life settlement process.

Get Your Free Life Settlement Valuation

Instead of relying on a potentially misleading sell your life insurance calculator, get a free thorough assessment from our team of experts. We’ll start by determining your eligibility, then calculate the value of selling your policy through a life settlement. The quote we provide is absolutely free, and you are under no obligation to sell your policy because you receive this information. 

If you decide to move forward with the transaction, Harbor Life will handle all of the legal paperwork and help you maximize the value of your policy by seeking bids from our network of buyers. By getting multiple offers, the sale price goes up and you get more value for your policy. If you’re interested in calculating the true value of selling your life insurance policy, fill out the form below or contact us to learn more.

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