How To Sell Group Life Insurance Policy

Unlike whole, term, and universal policies, selling a group life insurance policy involves specific steps.

To sell, you must convert it to an individual policy, typically upon retirement or job termination.

Once converted, cashing out is likely. If you’re a Federal Employee seeking to sell a FEGLI policy, our blog post “How to Sell a Federal Employee Group Life Insurance Policy” can guide you.

Group life insurance policy
Group life insurance policy: Photo (Sapling)

When selling your group life insurance, you have two main options: viatical settlement or life settlement.

Our blog post explains the selling process, along with its pros and cons.

What is a group life insurance policy?

A group life insurance policy is a type of life insurance typically provided by an employer. The policy covers all employees in the group, and premiums are usually paid in part or fully by your employer.

Group life insurance policies can benefit employees, as they often have lower premiums than individual policies.

Can I sell a group life insurance policy?

In some cases, yes, you can sell a group life insurance policy. However, this may depend on the specifics of your policy contract.

If you have a policy through your employer, you need to convert it to an individual policy in order to sell it.

In order to convert the policy to an individual one, you must be separated from your employer through retirement or termination.

How to sell a group life insurance policy?

When you decide to sell your group life insurance policy, there are two main ways that you can do this: through a viatical settlement or a life settlement.

Here’s a look at the steps you need to take to complete either of these types of sales:

Viatical Settlement

When you use a viatical settlement, like with American Life Fund, we specialize in buying life insurance from individuals with severe illnesses.

We’ll request your health and policy details. After verifying, we offer a deal.

If accepted, we take over the policy, paying premiums and getting the death benefit.

You receive a lump-sum cash settlement.

Steps for applying for a viatical settlement

Start by completing our easy application to provide basic details about you and your policy.

Then, we’ll ask for extra documents like your policy copy and doctor’s info to collect medical records.

If you proceed with a viatical settlement, we’ll make an offer based on gathered data.

Upon acceptance, we’ll begin beneficiary transfer and give you a lump-sum cash payment once it’s done.

Requirements to apply for a viatical settlement

To qualify for a viatical settlement, you must:

Life Settlement

If you sell your policy through a life settlement, you can sell your policy to a life settlement company. You don’t have to have a serious illness to qualify, but you need to be 75 years of age or older. You also must have a life policy of $150,000 or more.

A life settlement allows you to sell your life insurance policy in exchange for a cash payout. This means no more paying pricey premiums—as payments become the responsibility of the life settlement company purchasing your policy.

Steps for applying for a life settlement

The first step is finding a life settlement company you are interested in working with, such as us here at American Life Fund. At American Life Fund, we specialize in both viatical and life settlements.

Next, you will need to provide the life settlement company with information about your policy, such as the death benefit amount and the premium amount, along with basic medical information.

Once the life settlement company has this information, they will make you an offer for your policy. You can then choose to accept the offer or decline and keep your policy.

If you accept their offer, you will sign over the beneficiary of your policy to the life settlement company and receive the agreed-upon payment amount.

Requirements to apply for a life settlement

To qualify for a life settlement, you must:

What are the benefits of selling a group life insurance policy?

Selling a group life insurance policy has advantages.

If no longer employed by the policy-offering company, you can avoid ongoing premium costs.

Also, selling a high death benefit policy gives a lump sum for various needs.

What are some things to consider before selling my group life insurance policy?

Before selling your group life insurance, consider key factors. Understand policy terms and ensure a fair price.

Be mindful of tax implications—selling means paying taxes on profits, except for viatical settlements, which are tax-exempt for insured individuals.

How much can I expect to get from selling my policy?

The amount of money you can get from selling your policy will depend on a few factors, including your policy’s death benefit, premium payments, your age, and your health.

Selling Your Group Life Insurance Policy

Got an unnecessary group life insurance policy? Sell it for a lump sum!

Use the cash as you wish—clear debt, boost retirement, cover medical costs, or any financial need.


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