Yes — a variable universal life policy can be sold in a life settlement if you and the policy qualify. The buyer buys the contract from you, so the issuing carrier’s permission is not needed and the carrier plays no part in whether you sell. This has been settled law since the Supreme Court’s 1911 decision in Grigsby v. Russell, which treated a life policy as transferable property.
Before anything else, though, confirm who actually issued the contract you are holding. Aflac’s U.S. reputation was built on supplemental health insurance — cancer, accident, hospital indemnity and disability plans enrolled at the workplace — and its life insurance line is secondary and largely worksite-based. Variable universal life is a registered securities product sold with a prospectus by a licensed representative, which is a different distribution world from payroll-deduction enrollment. Many people who believe they own “an Aflac VUL” are actually holding a supplemental health certificate, a small worksite term or whole life certificate, or a variable policy issued by a different company entirely and sold alongside Aflac products by the same agent.
This guide shows you how to identify what you own, then explains how VUL specifically is valued in the secondary market — which is not the way most owners expect. Verify Aflac’s 2026 individual life lineup with the company directly. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Aflac, and nothing here is legal, tax or investment advice.
In This Article
- Step One: Identify the Issuing Company and the Product
- Why This Month’s Cash Value Is Not Next Month’s
- The Fee Drag: M&E, Fund Expenses and Rising Cost of Insurance
- What Buyers Actually Value — and It Is Not the Subaccount Balance
- Documents to Pull Together
- Selling, Surrendering, or Restructuring — Comparing the Options
- Timeline, Safeguards and Next Steps
- Frequently Asked Questions
Step One: Identify the Issuing Company and the Product
Variable universal life leaves a paper trail that nothing else in the insurance world leaves. If you own a VUL, you were given a prospectus at the point of sale, your statements list subaccounts with fund names, and the values move with the markets from quarter to quarter. You will also see charges labeled mortality and expense risk, fund management fees, and cost of insurance.
Now compare that to what a typical Aflac enrollee holds. Aflac — American Family Life Assurance Company, founded in Columbus, Georgia in 1955 — sells most of its U.S. coverage through employers on a payroll-deduction basis, and it is the supplemental health products that dominate. Those documents are usually certificates with benefit schedules tied to diagnoses and hospital stays, not investment statements.
The cover page settles it. It names the issuing insurance company, the insured, the face amount and the issue date. If the issuing company on that page is not Aflac, then Aflac’s product line is beside the point and the conversation is about the carrier that actually wrote the contract. Confirm the current servicing company by calling the number on your most recent statement, as of 2026.
Why This Month’s Cash Value Is Not Next Month’s
VUL is the one permanent policy type where the cash value is a moving target. Premiums net of charges are allocated to separate-account subaccounts — essentially mutual-fund-like portfolios held apart from the insurer’s general account. When those markets rise, cash value rises. When they fall, cash value falls, and there is normally no guaranteed floor under it.
That matters in a settlement for a practical reason: the surrender value you were quoted in January is not the surrender value in June. If you are comparing an offer against surrendering the policy, you are comparing against a number that keeps moving. Anyone who tells you the comparison is fixed is oversimplifying.
It also means the risk of an underfunded VUL is carried entirely by you. Because the separate account bears investment risk, a stretch of poor returns can leave the policy account too thin to cover monthly charges. For the mechanics of the surrender figure itself, see how cash surrender value works.
The Fee Drag: M&E, Fund Expenses and Rising Cost of Insurance
Three layers of cost eat at a VUL every month:
- Mortality and expense risk (M&E) charges are deducted from separate-account assets to compensate the insurer for the death benefit guarantee and its expense risk. They are charged whether the market goes up or down.
- Fund-level expenses sit inside each subaccount, on top of the policy-level charges.
- Cost of insurance (COI) is the monthly charge for the pure death benefit, and it rises with the insured’s attained age. This is the one that ruins policies.
In the early years the account is small and COI is cheap, so nothing looks wrong. In the insured’s seventies and eighties, COI climbs steeply. If the subaccounts have underperformed, monthly deductions start consuming principal, and the account value falls even while the markets are calm. That is the classic underfunded VUL problem: the illustration suggested the policy would carry itself, and it did not.
Owners typically discover this when the carrier sends a notice demanding a much larger premium to keep coverage in force. That notice is a good reason to run a settlement review rather than simply letting the policy go.
| VUL Feature | What It Means for You | What It Means to a Buyer |
|---|---|---|
| Separate-account subaccounts | Cash value rises and falls with markets; no guaranteed floor | Largely irrelevant — the death benefit is the asset |
| M&E and fund expenses | Ongoing drag on account value in every market | Raises the projected premium needed to keep the policy alive |
| Cost of insurance rising with age | Premium demands often spike in the 70s and 80s | Priced directly into the offer |
| Outstanding policy loan | Reduces net death benefit and accrues interest | Deducted from proceeds at closing |
| Large net death benefit | The coverage you may no longer need | The primary driver of value |
What Buyers Actually Value — and It Is Not the Subaccount Balance
Owners often assume a buyer is purchasing the investment account. They are not. A settlement buyer is purchasing the right to receive the death benefit, and taking on the obligation to fund the policy until then.
So the underwriting focuses on:
- The net death benefit after any outstanding policy loan, which is deducted from proceeds at closing.
- The premium load — what it will realistically cost to keep the contract in force, drawn from an in-force illustration run at both current and guaranteed assumptions.
- The insured’s life expectancy, estimated by independent actuarial underwriters from medical records.
A large subaccount balance can actually work against you: it raises the surrender floor a buyer must beat while also representing money the buyer is unlikely to keep, since maintaining the death benefit is the point. Policies with a substantial face amount, a manageable premium requirement and a modest account value often price best. The federal GAO market study (GAO-10-775) found sellers typically received roughly 10% to 35% of face value, and commonly four to eight times what surrendering would have paid.
Documents to Pull Together
For a variable policy, gather:
- The cover page — issuing company, policy number, insured, face amount, issue date. That is all Pine Lake needs to start a free review.
- The most recent annual statement — current account value, surrender value, loan balance, subaccount allocations and the schedule of charges.
- An in-force illustration — request it from the servicing company and ask for multiple versions: one at a conservative assumed rate of return, one at the guaranteed minimum, and one showing the premium required to carry the policy to age 100 or later. The version at guaranteed assumptions is the one that reveals the projected lapse date. See how to request an in-force illustration.
Because VUL is a registered product, your original prospectus and any supplements are also worth locating. They spell out the M&E and fund charges you have been paying.
Selling, Surrendering, or Restructuring — Comparing the Options
A settlement is one of several exits, and it is not automatically the best one. Put them side by side:
- Keep and refund the policy. If heirs still need the death benefit and you can afford the higher premium, paying it may be the cheapest coverage you will ever buy at your current age.
- Reduce the face amount. Lowering the death benefit lowers the cost of insurance and can stabilize an underfunded contract.
- Surrender. Simple and fast, but you receive only the surrender value — and on a VUL that number depends on where the markets closed.
- 1035 exchange. Moving cash value into a different policy or an annuity may defer tax, but it is a technical move that needs professional review.
- Life settlement. A lump sum, typically well above surrender value for qualifying policies, and the premium obligation ends.
Work through the trade-offs in is a life settlement worth it and settlement versus surrender. Decisions with tax consequences belong with a CPA, not a website.
Timeline, Safeguards and Next Steps
Expect 60 to 120 days end to end. The review takes days; documentation and life expectancy underwriting take two to four weeks or longer; offers, contracts and the carrier’s ownership change take the rest.
Three safeguards are non-negotiable. First, funds should be held by an independent escrow agent and released only after the carrier confirms the ownership transfer. Second, every offer should be in writing, with gross and net-of-commission figures disclosed if a broker is involved. Third, most states provide a rescission period after funding during which you can unwind the sale — know the length of yours before you sign.
To find out whether your policy is even a candidate, send the cover page for a free review, or call (305) 209-7183. If you also hold other Aflac coverage, see our guides to selling an Aflac guaranteed universal life policy or an Aflac group life policy, and browse the education center for background on the market.
Frequently Asked Questions
Does the carrier have to approve the sale of my variable policy?
No. You are selling the contract, not asking permission to change it. The carrier records the new owner and beneficiary after closing, but it is not a party to the decision and cannot veto a properly documented transfer.
How do I confirm my policy is really a VUL?
Look for subaccounts on your statement, values that change with market performance, and a prospectus delivered at the time of sale. If your document instead lists benefits by diagnosis or hospital stay, it is a supplemental health certificate rather than life insurance and cannot be sold.
My subaccounts lost value. Is my policy worthless to a buyer?
Not necessarily. Buyers price the death benefit and the cost of maintaining it, not the investment balance. A poorly performing VUL with a large face amount can still be an attractive candidate, even when the surrender value is disappointing.
The carrier says I must pay a much higher premium. What are my options?
You can pay it, reduce the face amount to lower the cost of insurance, surrender for whatever the account is worth, or explore a life settlement. Run an in-force illustration at guaranteed assumptions first so you can see the projected lapse date, then compare the options with a professional.
How much can a VUL policy sell for?
The federal GAO study (GAO-10-775) found sellers typically received about 10% to 35% of face value, often four to eight times the cash surrender value. The actual figure depends on the insured’s age and health, the net death benefit and the projected premium load.
Does a policy loan reduce what I receive?
Yes. An outstanding loan plus accrued interest reduces the net death benefit a buyer is acquiring, and it is deducted from the proceeds at closing. Pull your current loan balance from the most recent statement before you compare offers.
What do I send to get a free review?
Just the policy cover page — the first page showing the issuing company, policy number, insured’s name, face amount and issue date. That is enough to tell you whether the policy is worth pursuing. There is no cost and no obligation.
Should I stop paying premiums while I wait for offers?
No. A lapsed policy has no value to sell, and reinstating it can require evidence of insurability and back premiums with interest. Keep the contract in force until the transaction funds and the ownership change is recorded.
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
- Cash Surrender Value Life Insurance
- What Is An In Force Illustration
- Is A Life Settlement Worth It
- Life Settlement Vs Surrender
- Education Center
- Sell My Aflac Guaranteed Universal Policy
- Sell My Aflac Group Life 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.