You can sell a life insurance policy you no longer need to a licensed buyer for a cash payment, and that payment is normally larger than the cash surrender value the insurance company would give you. The buyer becomes the owner, takes over the premiums, and collects the death benefit later. You get money now.
Across Dallas-Fort Worth — Dallas, Tarrant, Collin and Denton counties — the households where this comes up most are in Plano, Richardson, North Arlington and the Mid-Cities, where a large retiree population bought permanent coverage decades ago to protect a mortgage or a young family. The mortgage is paid, the children are grown, and the premium notice still arrives every year.
The first step is one sheet of paper. The policy cover page lists the carrier, policy number, face amount, issue date and owner — enough for a free review to say whether the policy has secondary-market value. Send the policy cover page for a free policy review with no obligation, or call (305) 209-7183.
In This Article
The Texas Legal Framework
Life settlements in Texas are governed by Texas Insurance Code Chapter 1111A, which covers life settlement contracts and is administered by the Texas Department of Insurance. The chapter licenses the providers who buy policies and the brokers who shop them, requires disclosures to the seller, and gives sellers a right to rescind after funding.
Policies also have to season before they can be sold. Two years from issue is the common national standard, a few states use five, and hardship exceptions are frequently available for terminal illness, divorce, retirement or bankruptcy. Verify the current 2026 Texas requirement with the Department rather than assuming.
Does Your Policy Qualify?
Start with the death benefit. Pine Lake reviews policies of $100,000 or more, and smaller face amounts rarely support the underwriting costs a settlement requires. Then the type: whole life, universal life and guaranteed universal life all trade regularly, and term insurance trades only while its conversion privilege is still open.
The remaining factors are the insured’s age and health and the premium required to keep the policy in force. Buyers pay more when the projected premium burden is lower relative to the death benefit, which is why two policies with identical face amounts can be valued very differently.
What a Complete Submission Contains
Four documents make a file: the policy cover page, a current in-force illustration from the carrier, a recent carrier statement showing cash value and premium status, and a signed HIPAA authorization permitting review of medical records. You sign every release, and you can stop the process at any point before closing.
Order the in-force illustration early. It comes from the insurer, not from you, and it is the item that most often stalls a file for two or three weeks while everything else waits.
| Policy type | Usually sellable? | What determines the value |
|---|---|---|
| Whole life | Yes | Age, health, premium cost, face amount |
| Universal life | Yes | Cost of insurance charges and funding level |
| Guaranteed universal life | Yes | Guarantee period and premium to maintain it |
| Convertible term | Sometimes | Whether the conversion window is still open |
| Non-convertible term | Rarely | Usually nothing to transfer |
| Group coverage | Depends | Whether it can be converted to an individual policy |
Timeline, Escrow and Rescission
Expect roughly 60 to 120 days from submission to funding. Carrier response times and independent life expectancy reports drive most of the calendar, not negotiation.
At closing, the purchase price goes to an independent escrow agent rather than moving directly from buyer to seller. Escrow releases the funds only after the carrier confirms the change of ownership and beneficiary. Texas also provides a statutory rescission window after funding — commonly around 15 days in this market, though the Texas 2026 figure should be verified — letting a seller undo the transaction by returning the proceeds.
Why People in DFW Sell
Care costs are the most common reason. Nursing home care in the Dallas-Fort Worth market runs roughly $6,500 a month for a semi-private room and about $8,500 for a private room in 2026 — ballpark figures worth checking against the latest CareScout/Genworth Cost of Care survey. That is lower than the coastal metros and still more than most retirement incomes can absorb.
Long-term care Medicaid in Texas runs through STAR+PLUS managed long-term services and supports, with a $2,000 individual countable-asset limit. That is a strict ceiling, and it is where an old policy’s cash surrender value becomes an obstacle rather than a cushion. Texas also runs an aggressive Medicaid Estate Recovery Program (MERP) that files a claim against the probate estate after death, which changes what a family expects to pass on.
Three Numbers Before You Accept Anything
Ask the carrier for your current cash surrender value and your reduced paid-up death benefit, both in writing. Then compare the net proceeds of any settlement offer against them. Those three numbers are the whole decision.
For orientation, settlements are commonly cited between 10% and 35% of face value, and the Government Accountability Office’s 2010 study (GAO-10-775) found settlements paying roughly four to eight times what those same policies would have produced at surrender. Ranges describe a market; your policy gets its own number.
Taxes, MERP and Who Else Belongs in the Conversation
Proceeds are generally taxed in layers: amounts up to your cost basis are treated as a return of premium, and amounts above that may be taxable. The 2017 tax law simplified the basis calculation. A CPA should look at your specific policy before you close — nothing here is tax advice.
If Medicaid, MERP exposure or a spouse’s finances are in play, a licensed Texas elder law attorney should be involved as well. When you are ready on the insurance side, Send the policy cover page for a free policy review with no obligation, or call (305) 209-7183. Pine Lake Life Solutions typically pays more than cash surrender value and the review costs nothing.
This page is educational only and is not legal, tax, or investment advice. Confirm every 2026 figure with the agency involved or a licensed Texas professional before acting.
Frequently Asked Questions
Who regulates life settlements in Texas?
The Texas Department of Insurance, under Texas Insurance Code Chapter 1111A covering life settlement contracts. The chapter licenses providers and brokers and sets disclosure and rescission requirements for sellers.
How long must the policy have been in force?
Two years from issue is the common national standard, with a few states at five and hardship exceptions for terminal illness, divorce, retirement or bankruptcy. Confirm the current Texas requirement for 2026 with the Department of Insurance.
What will my policy sell for?
That depends on the insured’s age and health, the policy type, ongoing premium cost and the carrier. Published ranges commonly run about 10% to 35% of face value, and settlements have historically paid multiples of surrender value. A review of your actual policy is the only way to know.
Will the money affect Texas Medicaid eligibility?
Texas uses a $2,000 individual countable-asset limit for long-term care Medicaid through STAR+PLUS, so cash on hand counts. Selling at fair market value is not a gift and should not create a transfer penalty, but the proceeds still need a plan. Ask a Texas elder law attorney.
What is MERP?
The Medicaid Estate Recovery Program lets Texas file a claim against a deceased recipient’s probate estate for benefits paid. Texas administers it aggressively, so families should understand it before assuming assets will pass to heirs.
Do I need to appear in person?
No. Owners across Dallas, Tarrant, Collin and Denton counties complete these transactions by mail and secure document upload. Signatures are handled remotely with notarization where required.
What if the policy has a loan against it?
Outstanding loans reduce the net value and are settled at closing. Bring it up early so any offer reflects reality rather than being revised late in the process.
Find out what your policy is worth — free, confidential, no obligation.
A 15-minute educational review covers your eligibility, every alternative, and a realistic view of what each path would net you.
Related Reading
- What Policies Qualify For Life Settlement
- Life Settlement Vs Surrender
- Life Settlement Licensing Texas
- Life Settlement Taxes Texas
- Texas Medicaid Asset Income Limits
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.