Yes — a universal life policy can be sold through a life settlement when the owner and the policy qualify, and that is true for any carrier, Aflac included, because the buyer acquires the contract and the insurer’s consent is not required. The carrier is not a party to the decision.
Universal life is the workhorse of the secondary market. More settled policies are UL than any other type, and the reason is built into the product. Your premiums and credited interest accumulate in an account value; each month the insurer deducts the cost of insurance and expenses from it. Cost of insurance rises with age. Policies written from the 1980s through the 2000s were often illustrated at 8% to 12% interest and have spent years crediting near their guaranteed minimum, so account values erode and required premiums spike in the insured’s 70s and 80s.
One caution specific to Aflac: the company is best known for supplemental health coverage — accident, cancer, hospital indemnity — and many people who believe they hold Aflac “life insurance” are actually holding a health certificate with a small death benefit attached, which is not sellable. Confirm the product first. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Aflac.
In This Article
Confirm You Actually Hold Universal Life
Aflac Incorporated, of Columbus, Georgia, dates to 1955 and built its business on supplemental health insurance, later becoming widely recognized through the Aflac Duck campaign launched in 2000. Its life products have historically been a secondary, largely worksite line. As of 2026, verify Aflac’s current individual life lineup and which entity services your contract using the phone number on your billing notice.
To identify universal life, look on the specification page for: a specified amount or face amount, a planned periodic premium that is flexible rather than fixed, and an account value or accumulation value with a stated guaranteed minimum interest rate. If you instead see fixed premiums and a guaranteed cash value table, that is whole life. If you see a level term period and no cash value, that is term. And if you see a benefit schedule tied to hospital days or a diagnosis, that is supplemental health, not life insurance at all.
The Mechanics That Cause Trouble Later
A universal life policy is a running account. Money in: premiums plus credited interest, which cannot go below the contract’s guaranteed floor. Money out: the monthly cost of insurance, plus administrative charges and any rider costs.
The cost of insurance is priced on the odds of a claim in the coming year, so it climbs steeply with age. In the early decades the account value grows anyway. Later, the deductions can exceed everything coming in, the account value drains, and the policy enters a grace period and lapses — even for an owner who paid the billed premium faithfully for 30 years. Losing a $500,000 death benefit that way returns nothing at all, which is why so many UL owners look at the secondary market instead.
Request the In-Force Illustration — Both Versions
The in-force illustration is the document that answers the only question that matters: when does this policy fail if nothing changes? Request it from the servicing company and ask for two runs.
- Current assumptions use today’s crediting rate and current charges — the optimistic path.
- Guaranteed assumptions use the minimum credited rate and maximum permitted charges — the earliest legal lapse date.
Also ask what annual premium would carry the policy to age 100 or maturity. The distance between that number and what you pay now is the size of the problem. Our guide on reading an in-force illustration explains each column, and how offers are estimated shows how buyers use it.
What Drives the Offer
Buyers build a model with three inputs: the death benefit they will collect, the premiums they must pay in the meantime, and the estimated life expectancy of the insured. Universal life prices relatively well because it is flexible — a buyer can often fund it at a minimum sustaining level instead of the original planned premium, which reduces their carrying cost.
Cash value is a minor factor. Published market research including the GAO’s study (GAO-10-775) found sellers commonly received roughly 10% to 35% of face value, frequently four to eight times cash surrender value. On a drained UL policy where surrender value is close to zero, that comparison is not really a comparison at all.
| Stage of a UL policy | What the statement shows | What to do |
|---|---|---|
| Healthy | Account value growing, premium stable | Review the illustration every few years |
| Flattening | Account value stalled, deductions rising | Request current and guaranteed illustrations |
| Eroding | Account value falling despite payments | Get a free policy review now |
| Lapse notice | Additional premium demanded | Act immediately; do not let it lapse |
| In grace period | Coverage ending on a stated date | Disclose it upfront; timelines are tight |
Red Flags That Mean Act Now
Any of these should prompt a call this month, not next year:
- A notice that additional premium is required to prevent lapse.
- An account value lower than last year’s despite paying every bill.
- A premium increase or a request for a lump-sum catch-up.
- An illustration showing lapse before the insured’s late 80s.
- A policy already inside its grace period.
A policy in grace is much harder to transact. The buyer inherits an immediate funding problem, and underwriting may not finish before coverage ends. Earlier is always cheaper.
The Document Checklist
Send first: the policy cover page — insurer, policy number, face amount, issue date. It answers whether the policy clears the $100,000 threshold buyers generally work with, and it confirms the product type.
Then: the most recent annual statement showing account value, surrender value, monthly deductions and any loans; the in-force illustration described above; and a HIPAA authorization so a life-expectancy estimate can be prepared from medical records. Read any authorization before signing, keep a copy, and confirm it is specific and revocable.
Timeline and Safe Closing Practices
Plan on 60 to 120 days. The free review is fast. The illustration takes days to weeks. Medical records are the bottleneck. Offers should come in writing, with gross and net stated separately whenever a broker sits in the chain.
At closing, the purchase funds go into an independent escrow account before ownership changes hands. The carrier then records the new owner and beneficiary, and escrow releases your payment. Most states add a rescission window afterward during which a seller can unwind the transaction by returning the proceeds. Two rules protect you: never transfer ownership against a promise of later payment, and never stop paying premiums until the deal has funded.
Alternatives Worth Pricing First
A settlement is one option among several. If the coverage is still needed and the premium is sustainable, keep it. If the policy is overfunded for what your family needs, reducing the face amount can bring the premium back to earth. If there is real account value, surrender is available, though it usually pays least among the options that pay anything. And there are structures that let you shed the premium while retaining part of the death benefit — see policy options and is a life settlement worth it.
None of this is legal, tax or investment advice; the tax treatment of proceeds depends on your basis and the policy’s values, so consult your own CPA or attorney. Related guides: Aflac whole life and Aflac term life. To begin, send the policy cover page for a free policy review or call (305) 209-7183.
Frequently Asked Questions
How do I know my Aflac plan is universal life and not supplemental health?
Universal life shows a specified face amount, a flexible planned premium, and an account value with a guaranteed minimum interest rate. Supplemental health plans show benefit schedules tied to accidents, hospital days or a diagnosis. Only the first is a life insurance contract that can be sold.
Does Aflac have to approve the sale?
No. The buyer purchases the contract from you as the owner, and the carrier cannot block it. Aflac’s role is administrative: recording the change of owner and beneficiary once the transaction closes.
Why do so many universal life policies end up in life settlements?
Because the internal cost of insurance rises with the insured’s age while older policies often credit interest far below what was originally illustrated. Premiums jump in the 70s and 80s, and selling beats letting a large death benefit lapse for nothing.
My account value is nearly zero. Is the policy worthless?
Not necessarily. Buyers price the death benefit, the premiums required to maintain it, and life expectancy. Low cash value mainly means surrendering would pay you almost nothing, which makes a settlement the more meaningful comparison.
What exactly should I ask the carrier for?
An in-force illustration at current assumptions and one at guaranteed assumptions, plus the annual premium required to carry the policy to age 100. Those three items tell you and any buyer where the policy is headed.
How much might I receive?
There is no fixed percentage. GAO research on the market (GAO-10-775) found sellers commonly received roughly 10% to 35% of face value, often several times surrender value. Age, health, face amount and future premiums all move the number.
Can I stop paying while I wait for an offer?
No. The policy has to stay in force through closing or there is nothing to sell. Keep paying until funds are released from escrow and the carrier confirms the ownership change.
What is the minimum policy size?
Buyers generally work at $100,000 in death benefit and above, because underwriting, legal and escrow costs are roughly the same regardless of policy size. Send the policy cover page for a free review, or call (305) 209-7183.
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Related Reading
- What Is An In Force Illustration
- How Much Can I Get For My Life Insurance Policy
- How It Works Policy Options
- Is A Life Settlement Worth It
- Sell My Aflac Whole Life Policy
- Sell My Aflac Term Policy
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.