El Paso County has one of the largest concentrations of military retirees in the country, and military and federal life insurance follows different rules than the policies most life settlement articles describe — so the first question here is usually not what a policy is worth but what kind of policy it actually is. A life settlement is the sale of an existing policy to an institutional buyer who takes over the premiums and receives the death benefit later, with the seller taking a lump sum now. That only works with certain contracts, and group coverage like SGLI, VGLI and FEGLI generally is not one of them without a conversion or assignment step first.
Colorado Springs is the county seat, with Fountain, Monument and Manitou Springs among the communities across the county. Multiple military installations and a large federal and defense-contractor workforce mean that in a great many El Paso County households, the life insurance in the file cabinet started as a government or employer group benefit rather than something bought from an agent.
This page walks through those conversion rules, how a policy interacts with Health First Colorado’s long-term care rules, and what a free policy review involves. Pine Lake Life Solutions offers that review at no cost — send the policy cover page or call (305) 209-7183.
In This Article
- SGLI, VGLI and What Actually Happens at Separation
- FEGLI and the Assignment Question
- Health First Colorado and the $2,000 Line
- Cost of Care Along the Front Range
- The 60-Month Look-Back and Colorado Estate Recovery
- What a Free Policy Review Involves
- Escrow and How to Vet Any Buyer
- What to Do This Week
- Frequently Asked Questions
SGLI, VGLI and What Actually Happens at Separation
Servicemembers’ Group Life Insurance covers active-duty members, with the maximum coverage amount raised to $500,000 in 2023. It is group term insurance. It builds no cash value, and it ends shortly after separation.
Veterans’ Group Life Insurance is the follow-on: a servicemember can convert SGLI to VGLI, generally within one year and 120 days of separation, and applying within the earliest part of that window avoids health questions. VGLI is renewable group term coverage with premiums that rise with age, and it has no cash surrender value. There is nothing in a VGLI certificate for a settlement buyer to purchase.
What many veterans do not know is that VGLI carries a conversion privilege of its own: coverage may generally be converted to an individual commercial policy at a participating company, at standard rates without proof of health. Confirm the current list of participating companies and the exact deadlines with the VA or the SGLI/VGLI administrator, because those details change. That converted individual policy is a different instrument — and depending on its type and face amount, it may eventually be reviewable in the settlement market.
FEGLI and the Assignment Question
Federal Employees’ Group Life Insurance covers civilian federal employees and retirees, with Basic coverage tied to salary plus optional coverages. Like the military programs, it is group term insurance, and Option B and Option C premiums climb sharply in later age bands — a fact that catches many federal retirees off guard in their seventies.
FEGLI is not sold the way an individual policy is sold. What FEGLI does permit is an irrevocable assignment of ownership using the government’s assignment form, which transfers the right to name beneficiaries and control the coverage. Verify current procedures and the correct form with the Office of Personnel Management or your retirement system before doing anything, because an assignment cannot be undone.
The practical point for an El Paso County family: before assuming a federal retiree has nothing sellable, identify exactly what the coverage is. Basic FEGLI, an Option B multiple, a converted individual policy and an old privately purchased whole life contract are four different things with four different answers.
Health First Colorado and the $2,000 Line
Colorado’s Medicaid program is Health First Colorado. Long-term services and supports — nursing facility care and home and community-based waiver services — carry their own eligibility rules, and applications are generally processed through county human services departments, which for residents here means El Paso County.
A single applicant is generally limited to about $2,000 in countable assets. Verify the 2026 figure with the county or a Colorado elder law attorney. The primary residence within equity limits and one vehicle are generally excluded; the cash surrender value of a permanent life insurance policy is generally countable above a small face-amount exclusion.
Military retirement income and VA benefits complicate the income side of the test in ways a general Medicaid article will not cover. If a household has retired pay, VA compensation, Survivor Benefit Plan payments or Aid and Attendance, get advice specific to those benefits — and check whether VA Aid and Attendance is available before assuming Medicaid is the only route.
Cost of Care Along the Front Range
Long-term care in the Colorado Springs area generally prices somewhat below Denver but well above the national median. As a 2026 regional ballpark, plan on assisted living in the mid-four-figures to low-five-figures per month and semi-private nursing facility care meaningfully higher, with memory care above standard assisted living. Verify anything you intend to budget against the most recent CareScout (formerly Genworth) Cost of Care survey and by calling providers directly.
Households in Monument and the northern part of the county often find fewer local options and end up driving into Colorado Springs; Fountain and the southern communities face the same pattern in reverse. That travel is a real, uncounted cost.
Cash from a settlement is ordinary money once received, and it can pay for in-home hours, a bridge period before a waiver slot opens, or the difference between an acceptable option and the right one.
| Coverage | Type | Cash value? | Sellable as-is? |
|---|---|---|---|
| SGLI | Military group term | No | No — convert to VGLI at separation |
| VGLI | Veterans group term | No | No — but convertible to an individual policy |
| FEGLI Basic and Options | Federal employee group term | No | No — assignment of ownership is a separate process |
| Converted individual policy | Individual permanent or term | Depends on type | Possibly, if $100k+ and insured is a senior |
| Privately purchased whole or universal life | Individual permanent | Yes | Commonly reviewed |
General summary only. Confirm current program rules and deadlines with the VA or OPM before relying on any of it.
The 60-Month Look-Back and Colorado Estate Recovery
Colorado applies the federal 60-month look-back to long-term care Medicaid applications, examining five years of records for transfers made for less than fair market value. Gifts inside that window create a penalty period during which the program will not pay for care, beginning when the applicant would otherwise be eligible.
Colorado also operates an estate recovery program seeking repayment from the estates of deceased recipients aged 55 and older who received long-term care benefits, subject to federal exceptions and hardship provisions. Verify current 2026 practice with a Colorado elder law attorney.
Selling a policy at fair market value is not a gift — comparable value comes back into the applicant’s hands. Keep the offer letter, closing statement and escrow confirmation with the application file so a caseworker sees a documented sale instead of an unexplained deposit.
What a Free Policy Review Involves
It starts with the policy cover page: carrier, policy number, owner, insured and death benefit. For a group certificate, send the certificate page and the conversion or assignment information instead, because the first useful answer is often whether a conversion window is still open.
If a case is viable, the next documents are an in-force illustration from the carrier, a current statement showing cash value and any loan, and a signed HIPAA authorization allowing medical records to be ordered. Underwriting is the slow part; plan on roughly 60 to 120 days from submission to funding.
The review costs nothing and commits you to nothing. No legitimate firm charges a fee to evaluate a policy, and no one can quote a real number before medical underwriting is complete.
Escrow and How to Vet Any Buyer
At closing, the buyer wires funds to a third-party escrow agent who releases them only after the carrier records the ownership change. That sequence is the seller’s main protection. If anyone asks you to sign ownership over before money is in escrow, stop and get advice.
Colorado regulates insurance through the Division of Insurance within the Department of Regulatory Agencies, and that is where you verify a company before sending medical records anywhere. Ask whether the firm is a provider buying for its own account or a broker shopping your case for a commission taken from your proceeds, and get that commission stated in dollars on the closing statement. Ask about the rescission period, the window after closing in which a seller may cancel and return the money, and get the Colorado terms in writing.
Veterans should also be alert to a specific pattern: anyone who leads with military affiliation, offers to "help with VA benefits" for a fee, or bundles a policy transaction with a benefits application. VA-accredited representatives and veterans service organizations assist with benefits claims at no charge.
What to Do This Week
Identify what each policy is. Group certificate or individual contract? If group, is the conversion window still open, and what is the deadline in writing? If individual, call the carrier and request three numbers in writing: cash surrender value, outstanding loan balance, and the reduced paid-up death benefit.
Contact the Pikes Peak Area Agency on Aging, which serves El Paso County through the regional council of governments, and Colorado’s State Health Insurance Assistance Program for free counseling. For VA benefits, work with an accredited representative or a county veterans service officer.
For the policy side, Pine Lake Life Solutions reviews policies at no cost. Send the cover page or call (305) 209-7183.
This page is educational only and is not legal, tax, medical or investment advice. Verify current SGLI, VGLI, FEGLI and Health First Colorado rules with the VA, OPM, or a Colorado elder law attorney before acting.
Frequently Asked Questions
Can I sell my VGLI policy?
VGLI is group term coverage with no cash value, so it is not something a life settlement buyer can purchase as it stands. VGLI does generally carry a privilege to convert to an individual commercial policy at a participating company. Confirm the current participating companies and deadlines with the VA or the program administrator.
What happens to SGLI when I separate from service?
SGLI coverage ends shortly after separation, and the follow-on option is VGLI, generally available within one year and 120 days of separation. Applying early in that window avoids health questions. SGLI’s maximum coverage amount was raised to $500,000 in 2023.
Can FEGLI coverage be sold?
FEGLI is group term insurance and is not sold the way an individual policy is. It does permit an irrevocable assignment of ownership using the government’s assignment form, which is a permanent change. Verify current procedures with OPM or your retirement system before signing anything.
What is the Health First Colorado asset limit for long-term care?
A single applicant is generally limited to about $2,000 in countable assets. Verify the 2026 figure with El Paso County human services or a Colorado elder law attorney. The primary residence within equity limits and one vehicle are generally excluded.
Will selling a policy affect Medicaid eligibility?
A sale at fair market value is an exchange rather than a gift, so it should not create a look-back penalty, but the cash proceeds are countable once received. That usually means spending down or converting to exempt resources before eligibility. Keep the offer letter, closing statement and escrow confirmation.
How much do settlements typically pay?
Market-wide, settlements commonly fall between roughly 10% and 35% of the death benefit, and a 2010 GAO review found sellers received about four to eight times cash surrender value. The outcome depends on age, health, carrier and premium load. No one can give a real number before underwriting.
How do I check a company’s Colorado license?
Verify it through the Colorado Division of Insurance within the Department of Regulatory Agencies before sharing documents. Ask whether the firm is a provider or a broker and exactly how it is compensated on your case. Ask for the rescission period in writing too.
Does Pine Lake buy policies in Colorado?
This page is educational. Pine Lake Life Solutions offers a free policy review so you can compare a possible offer against surrendering the policy or keeping it. Send the policy cover page or call (305) 209-7183.
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
- Colorado Medicaid Asset Income Limits
- Life Settlement Licensing Colorado
- What Policies Qualify For Life Settlement
- Life Settlement Vs Surrender
- Sell Life Insurance Policy Jefferson County Co
- Is A Life Settlement Worth It
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.