The single most important fact for an Arlington County federal retiree is this: FEGLI itself generally cannot be sold in a life settlement — it can only be converted to an individual policy, and only within the window the program allows. A life settlement is the sale of an individually owned policy to a licensed institutional buyer who takes over premiums and later collects the death benefit. Offers commonly run about 10% to 35% of face value, several times what surrendering typically pays.
Arlington is unusual in Virginia: roughly 26 square miles, no incorporated towns, governed entirely as a single county with neighborhoods rather than municipalities — Rosslyn, Ballston, Crystal City, Clarendon, Shirlington. It also holds one of the densest concentrations of federal civilian retirees anywhere in the country, which makes group coverage the dominant form of life insurance here.
This page explains what that means practically. It is education only, not legal, tax or investment advice. For a free policy review, send the cover page or call (305) 209-7183.
In This Article
Why FEGLI Cannot Be Sold
FEGLI is the Federal Employees’ Group Life Insurance program, administered through the Office of Personnel Management. It is group term insurance: the government holds a master contract and you hold a certificate of coverage under it.
A life settlement requires an individually owned, transferable policy. There is no ownership interest in a group certificate that can be assigned to a buyer, which is why no legitimate firm will make an offer on FEGLI as such.
What FEGLI does carry is a conversion privilege. When coverage ends or is reduced, an eligible person generally has a limited period to convert to an individual policy with a participating commercial carrier, without medical underwriting. That individual policy is owned by you — and an owned policy can be evaluated. Verify your rights, timing and the participating carrier list directly with OPM.
The Age-Band Premium Problem
FEGLI Basic coverage carries a post-retirement reduction election, and optional coverage is priced in age bands that climb steeply in later life. Retirees in their late seventies and eighties routinely find the optional premiums have outgrown any reasonable value they are getting.
The choice then looks binary and unappealing: keep paying, or cancel and receive nothing, because group term has no cash value. Conversion is the third door, and it is the one people most often miss because the deadline passes quietly.
If a retiree is considering dropping optional FEGLI coverage, the conversion analysis should happen before the coverage ends — not after.
Virginia Medicaid in a High-Cost County
Virginia Medicaid operates under Cardinal Care, with long-term services and supports for many members provided through the Commonwealth Coordinated Care Plus waiver. Arlington residents apply through the county’s Department of Human Services.
A single applicant is generally limited to $2,000 in countable assets; verify the 2026 figure locally. Permanent life insurance cash value is generally countable above a small face-amount exclusion. Group term coverage has no cash value and typically nothing to count.
Care costs in the Washington metro are among the highest in the nation. Any figure you see should be treated as a 2026 ballpark and checked against the current CareScout (formerly Genworth) Cost of Care survey, but the structural point holds: monthly costs here routinely exceed retirement income, even a federal annuity.
| What you hold | Cash value? | Sellable? | Best next move |
|---|---|---|---|
| FEGLI Basic or Optional | No | No | Ask OPM about conversion rights and deadlines |
| Association group life | Usually no | Generally no | Ask the sponsor about conversion or portability |
| Individual whole life | Yes | Often | Request surrender value and in-force illustration |
| Universal or guaranteed UL | Sometimes | Often | Check how long coverage is projected to last |
| Convertible term | No | After conversion | Find the conversion deadline in the contract |
| Policy owned by a trust | Varies | Trustee decision | Consult the drafting attorney first |
General summary. Confirm FEGLI specifics with OPM and policy specifics with the issuing carrier.
Look-Back, Estate Recovery and Sequencing
Virginia reviews 60 months of transfers before a Medicaid application. Giving assets away inside that window can create a penalty period during which the program will not pay for long-term care.
A documented sale at market value is a different animal from a gift. The proceeds remain countable and must be spent down under program rules, but the transaction is defensible on its face.
Virginia also pursues estate recovery from members who received long-term care benefits after age 55. In a county where a modest condominium can carry substantial value, that is a live consideration and a reason to involve an elder law attorney early.
Individually Owned Policies That Do Qualify
Beyond federal coverage, many Arlington households hold individually owned policies bought decades ago: whole life from a first job, universal life bought in the 1980s or 1990s, or convertible term from a private-sector stint between federal appointments.
The general threshold is $100,000 or more in death benefit with an insured around 65 or older, or younger with a significant change in health. A convertible term policy can often be converted to permanent coverage and then evaluated, but only while the conversion right is open.
Association and professional-organization group life shows up here too. Like FEGLI, those certificates are generally not sellable, but some carry conversion features worth asking about.
How to Vet Anyone Who Contacts You
Verify licensing with the Virginia State Corporation Commission’s Bureau of Insurance, which regulates viatical settlement providers and brokers. Ask for the license number before you send a single medical record.
Ask whether the firm is a broker representing you or a provider buying for its own account, and how it is compensated either way. Then ask for the gross offer, all fees and your net proceeds in writing.
Require independent escrow so funds are released only after the carrier confirms the ownership change, and confirm the rescission period stated in your contract. A firm that resists any of these questions has answered the most important one.
A Practical Order of Operations
First, list every piece of coverage and mark which are group certificates and which are individually owned contracts. Second, contact OPM about FEGLI conversion rights and the carriers about surrender values and in-force illustrations.
Third, if long-term care or a Medicaid application is on the horizon, bring a Virginia elder law attorney into the conversation before anything is cancelled, converted or sold.
Pine Lake Life Solutions offers a free, no-obligation review of individually owned policies with $100,000 or more in death benefit and typically pays more than cash surrender value. Send the policy cover page or call (305) 209-7183.
Frequently Asked Questions
Can FEGLI be sold in a life settlement?
Generally no. FEGLI is group term coverage under a federal master contract, so there is no individually owned policy to transfer to a buyer. The relevant option is conversion to an individual policy with a participating carrier under OPM’s rules, and that individual policy could later be evaluated. Confirm conversion eligibility and deadlines with OPM.
Is FEGLI conversion medically underwritten?
The conversion privilege is generally designed to let eligible people obtain individual coverage without proof of good health, but the terms and the participating carrier list are set by the program. Premiums on the converted policy are based on age and are typically much higher than group rates. Get the specifics in writing from OPM before you decide.
What is Virginia’s countable-asset limit for long-term care Medicaid?
A single applicant is generally held to $2,000 in countable assets under Virginia Medicaid; verify the 2026 figure with Arlington County’s Department of Human Services. The primary residence within equity limits and one vehicle are typically excluded. Income is evaluated separately.
Does a federal annuity affect Medicaid eligibility?
Annuity income is counted in the income test, and the interaction with spousal rules can be complicated. Decisions about survivor benefit elections and Medicaid planning should be made together, not separately. A Virginia elder law attorney is the right advisor for that analysis.
What does a life settlement usually pay?
Roughly 10% to 35% of the face amount is the common range, based on the insured’s age and health and the cost of keeping the policy in force. A 2010 GAO study found sellers received about four to eight times the surrender value. Any specific number requires reviewing the actual policy.
How long does the process take?
Generally 60 to 120 days from submission to funded closing. Getting the in-force illustration from the carrier and completing medical underwriting are the main time drivers. Requesting carrier documents immediately is the fastest way to shorten the wait.
How do I verify a firm is licensed in Virginia?
Ask for the license number and check it with the Virginia State Corporation Commission’s Bureau of Insurance. Also clarify whether the firm is brokering your policy or buying it directly. Fees, commissions and net proceeds should all appear in writing before you sign.
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Related Reading
- What Policies Qualify For Life Settlement
- Life Settlement Licensing Virginia
- Virginia Medicaid Asset Income Limits
- Life Settlement Vs Cash Surrender Value
- Education Center
- Sell Life Insurance Policy Prince William County Va
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.