Loudoun County has the highest median household income of any county in the United States, and one common result is a large permanent life insurance policy that was bought for an estate tax problem the family no longer has. A life settlement is the sale of that in-force policy to a licensed institutional buyer, who assumes the premiums and receives the death benefit later. Proceeds typically run about 10% to 35% of the face amount — and a 2010 U.S. Government Accountability Office study found sellers netted roughly four to eight times the surrender value.
Leesburg is the county seat. Ashburn sits at the center of the county’s data-center corridor, Sterling anchors the eastern end near Dulles, and Purcellville holds the western, more rural half of the county. The financial profile skews toward federal contractor executives, technology leadership and long-tenured professionals — people whose planning documents were drafted under a very different set of tax rules.
This page is educational and is not legal, tax or investment advice. To have a policy reviewed at no cost, send the cover page or call (305) 209-7183.
In This Article
The Estate-Planning Policy That Outlived Its Purpose
Many large permanent policies in Loudoun County were bought in an era when the federal estate tax exemption was a small fraction of what it is today. The policy existed to give heirs liquidity to pay a tax bill.
With the exemption now far higher, a great many of those families no longer face federal estate tax at all. The policy remains, the premium remains, and the original reason for both has quietly evaporated.
That does not automatically mean sell. It means the policy deserves an actual decision rather than another year of autopay. Reduced paid-up options, premium reductions, a 1035 exchange, keeping the coverage for non-tax reasons, and a settlement are all on the table — and they should be compared against each other.
Policies Held Inside a Trust
A large share of Loudoun’s older permanent policies are owned by an irrevocable life insurance trust rather than by the insured personally. That changes who can sell.
The trustee — not the insured — holds the authority, and the trust instrument governs whether a sale is permitted and what fiduciary duties apply. Beneficiaries usually need to be informed. This is squarely attorney territory, and it is one of the most common reasons a settlement conversation stalls.
If a trust owns the policy, the first call is to the drafting attorney or successor trustee, not to a buyer. Bring the trust document and the policy cover page to that meeting.
High Income Is Not the Same as Medicaid Immunity
It is tempting to assume Medicaid is irrelevant in the highest-income county in the country. Long-term care costs have a way of correcting that assumption, particularly for a surviving spouse after several years of paid care.
Virginia Medicaid operates under the Cardinal Care umbrella, with long-term services delivered for many members through the Commonwealth Coordinated Care Plus waiver. A single applicant is generally held to $2,000 in countable assets — verify the 2026 figure with the Loudoun County Department of Family Services.
Virginia applies a 60-month look-back to transfers made for less than fair value and operates an estate recovery program for members who received long-term care benefits after age 55. Both belong in any serious plan, regardless of household income.
| Question to ask before selling | Who answers it | Why it matters |
|---|---|---|
| Who legally owns the policy? | The carrier and your attorney | A trust-owned policy can only be sold by the trustee |
| What does it cost to keep in force? | The carrier’s in-force illustration | Drives both the offer and the keep-versus-sell math |
| Is the original estate-tax purpose still real? | Your estate planning attorney | Many pre-reform policies now fund a nonexistent liability |
| How will proceeds be taxed? | Your CPA | Basis, surrender value and sale price all factor in |
| Is the buyer licensed in Virginia? | SCC Bureau of Insurance | Licensing is verifiable in minutes and non-negotiable |
| Who holds the funds at closing? | The purchase agreement | An independent escrow agent should, not the buyer |
Educational checklist only. Confirm each item with your own advisors.
What Buyers Want to See
The general profile is a death benefit of $100,000 or more — and Loudoun policies are frequently multiples of that — an insured around 65 or older, and a financially sound issuing carrier. Guaranteed universal life, universal life, whole life, survivorship policies and convertible term all trade.
Larger face amounts do not automatically mean larger percentages. Pricing turns on life expectancy and on the cost of keeping the contract in force, which is why an in-force illustration is the most informative single document in the file.
Second-to-die survivorship policies deserve their own mention here, since they were the classic estate-tax funding vehicle. They can be sold, but they are more complex to underwrite because two lives are involved.
Vetting a Provider Without Relying on Reputation
Verify licensing with the Virginia State Corporation Commission’s Bureau of Insurance, which regulates viatical settlement providers and brokers in the Commonwealth. Ask for the number; a licensed firm will hand it over without hesitation.
Establish the role. A broker represents the seller and shops the policy for a commission; a provider buys with its own capital. In a high-face-amount transaction, the commission structure can be worth six figures, so the disclosure is not a formality.
Insist on a written breakdown: gross offer, every fee and commission, and net proceeds to you. Insist on third-party escrow. Confirm your rescission window in the contract itself.
Documents and Timeline
Begin with the policy cover page. Then request an in-force illustration and a current statement from the carrier, and sign a HIPAA authorization for medical underwriting. If a trust owns the policy, add the trust document and trustee authority.
Plan on roughly 60 to 120 days from submission to funded closing. Trust-owned policies and survivorship contracts tend to sit at the longer end of that range because of the extra legal review.
Where to Start This Week
Find the policy, find the owner of record, and find out what it costs each year to keep it alive. Those three facts drive every option that follows.
If your estate plan predates the current federal exemption, ask your attorney whether the insurance still serves the purpose it was bought for. Ask your CPA how a sale would be taxed given your basis, since some proceeds may be ordinary income and some capital gain.
Pine Lake Life Solutions offers a free policy review for individually owned or trust-owned policies of $100,000 or more in death benefit and typically pays more than cash surrender value. Send the cover page or call (305) 209-7183.
Frequently Asked Questions
Our policy is owned by an irrevocable trust. Can it still be sold?
Often yes, but the trustee holds the authority and the trust document controls what is permitted. Fiduciary duties to the beneficiaries apply, and beneficiaries usually need to be notified. Start with the attorney who drafted the trust rather than with a buyer.
We no longer owe federal estate tax. Should we drop the policy?
Not without comparing the alternatives. Lapsing returns nothing, surrendering usually returns far less than a sale, and a reduced paid-up option can preserve a smaller death benefit with no further premiums. Run all four options against each other before deciding.
Can a survivorship or second-to-die policy be sold?
Yes, though pricing is more complicated because underwriting must consider two insured lives. These policies are common in Loudoun County precisely because they were the standard estate-tax funding tool. Expect a longer review timeline than for a single-life contract.
Does a high income disqualify a family from Medicaid planning?
Medicaid eligibility turns on countable assets and income at the time of application, not on lifetime earnings. Several years of long-term care costs can materially change a household balance sheet. A Virginia elder law attorney is the right person to model that.
How is a settlement taxed?
Treatment depends on cost basis, surrender value and sale price, and federal rules changed in 2017. Portions may be treated as ordinary income and portions as capital gain. This is not tax advice — have your CPA compute your specific outcome.
What percentage of face value is realistic?
The general market range is roughly 10% to 35% of the death benefit. Age, health and the projected cost of keeping the policy in force matter far more than the size of the face amount. A firm number requires a review of the actual contract and an in-force illustration.
How do I verify a buyer is legitimate?
Check the license with the Virginia State Corporation Commission’s Bureau of Insurance and ask whether the firm is a broker or a provider. Require a written breakdown of gross offer, fees and net proceeds. Require third-party escrow and a stated rescission period.
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
- Life Settlement Vs Surrender
- Virginia Medicaid Asset Income Limits
- Life Settlement Taxes Virginia
- How Much Can I Get For My Life Insurance Policy
- Education Center
- Sell Life Insurance Policy Arlington 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.