Two questions bring people to this page, and the answers are different: can I sell it, and is it still safe now that American National is leaving the life insurance business?
The first answer is almost always no, for a reason that has nothing to do with the carrier. Burial and final expense contracts are typically written between $5,000 and $25,000. Life settlement providers operate on policies of $100,000 and up, with real competitive bidding starting higher, because the fixed cost of a life expectancy report, medical record retrieval, legal review and escrow does not shrink with the death benefit. A $12,000 policy cannot support that overhead at any price a rational buyer could pay.
The second answer is more reassuring than the headlines suggest. American National announced it would exit the life insurance business, stopping new life sales while continuing to service and honor policies already in force. An insurer that stops writing new business does not stop paying claims; the contracts remain binding obligations, and there is a state-level backstop behind them as well. What follows explains both answers properly, and lays out the moves that actually create value on a small policy. Pine Lake Life Solutions provides education and a free policy review; it does not purchase policies and is not licensed in every state.
In This Article
- What American National’s exit does and does not change
- The guaranty association backstop, explained accurately
- Why the settlement market does not reach this size
- Simplified issue, and the waiting period nobody reads
- Pre-need contracts sold through a funeral home
- The moves that actually produce value
- Frequently Asked Questions
What American National’s exit does and does not change
American National Insurance Company was founded in Galveston, Texas in 1905 by W.L. Moody Jr., is domiciled in Texas, and is regulated as to domicile by the Texas Department of Insurance. New York business is written through American National Life Insurance Company of New York, with operations in the Albany area, under the New York State Department of Financial Services. The group also maintains operating hubs in Springfield, Missouri and League City, Texas.
The ownership changed first. In May 2022 Brookfield Reinsurance completed a $5.1 billion all-cash acquisition of American National Group at $190 per share, taking the company private and ending its public listing. The strategy shift followed. American National stopped accepting term life applications in December 2023, and in 2025 announced it would exit the life insurance business altogether, redirecting toward annuities, pension risk transfer and property-casualty lines. Reporting on the decision cited a $243.4 million net loss for 2024 in the context of that pivot. The company stated it would continue servicing all in-force policies without interruption and honor existing contracts.
For a burial policyholder the practical consequences are narrow. Your premium, face amount, beneficiary designation, riders and guaranteed values are contractual and do not change. What tends to change over time on a closed block is the service experience: no local agent whose income depends on your file, longer administrative turnaround, and correspondence routed through a designated servicing unit rather than a sales channel. Plan for that by putting requests in writing, citing the policy number, and keeping dated copies.
The guaranty association backstop, explained accurately
People confuse an insurer leaving a line of business with an insurer failing. They are entirely different events. A company that stops selling new policies is making a strategic choice; a company that fails is placed in receivership by its domiciliary regulator. American National ceasing life sales is the first thing, not the second.
That said, it is worth knowing what exists behind every life policy in the United States. Every state operates a life and health insurance guaranty association, funded by assessments on licensed insurers, which steps in when a member company is declared insolvent. Coverage is defined by each state’s own statute, generally following the NAIC model act, which sets minimum coverage at $300,000 in life insurance death benefits and $100,000 in net cash surrender value per insured life per company. A number of states have adopted higher limits. Coverage attaches based on the policyholder’s state of residence, not the insurer’s domicile.
Two honest caveats. Guaranty association protection is not a substitute for buying from a financially sound carrier, and by law insurers and agents are prohibited in most states from using it as a selling point. And a burial policy of $10,000 or $15,000 sits far below any state’s limit, so the protection is, for this size of contract, complete on its face. If you want the current limits for your own state, the association for that state publishes them and can be reached directly.
Why the settlement market does not reach this size
Look at what a provider actually spends before it can even make an offer. It commissions at least one independent life expectancy report from a specialist medical underwriting firm, at a cost running into four figures, and often a second for corroboration. It retrieves records from every treating physician. It pays legal and escrow costs at closing. Afterward it funds premiums and carries a servicing cost for as long as the insured lives.
Those costs do not shrink with the death benefit. Against a $2 million policy they disappear into the transaction. Against a $15,000 policy they exceed the entire economic value of the contract to a buyer. This is why providers publish minimums, and why any competent intermediary will tell you within one conversation that a burial policy is not a candidate. The practical thresholds are in minimum policy size for a life settlement and the category is addressed in can I sell a final expense policy.
The corollary is a warning. If someone solicits the purchase of a small burial policy, the economics of a genuine offer are not there. What such an approach does collect is a signed HIPAA authorization, a Social Security number, a date of birth and a list of your physicians — a complete identity package. Do not provide those to an unsolicited caller, mailer or website. The patterns are catalogued in life settlement scams and red flags.
| Concern | What is actually true | What to do |
|---|---|---|
| Carrier is exiting life insurance | New sales stop; in-force contracts remain binding obligations | Keep paying; put service requests in writing |
| Worry about insolvency | Exiting a line is not receivership; a state guaranty association exists if a company fails | Check your state association’s limits if you want the detail |
| Policy is $5,000 to $25,000 | Below every provider’s minimum | Do not shop it; work the in-policy options |
| Inside a graded benefit period | Natural-cause death pays far less than the face amount | Note the end date; do not replace the policy |
| Bought through a funeral home | Often irrevocably assigned to the provider | Ask an elder law attorney before changing anything |
Simplified issue, and the waiting period nobody reads
Final expense policies are priced around underwriting they deliberately do not perform. Simplified issue asks a handful of health questions and runs a prescription history check. Guaranteed issue asks nothing and accepts any applicant inside an age band, commonly 50 to 85. Both cost far more per thousand of coverage than a fully underwritten policy, because the carrier is accepting applicants it cannot screen.
Its protection is the waiting period. Under a graded or modified death benefit, death from natural causes during the first two or three years returns premiums with interest, or pays a stepped share of the face amount such as 30% in year one and 70% in year two, instead of the full benefit. Accidental death normally pays in full immediately.
Two things follow. If the insured is inside that period, the coverage genuinely in force today is a fraction of the number printed on the front page, and any decision should use the real figure. And replacing a graded policy restarts the clock, which is why swapping burial coverage late in life is usually a mistake regardless of how the premium comparison looks. Find the provision, note the date the period ends, and write it on the outside of the folder.
Pre-need contracts sold through a funeral home
A share of small-face coverage is not an ordinary policy. A pre-need funeral contract funds a specific goods-and-services agreement and is normally assigned to the funeral home, often irrevocably, so the proceeds go to the provider rather than to a family beneficiary. Some are designed so the benefit grows by a stated factor meant to track the cost of the selected services.
An irrevocably assigned pre-need contract cannot be sold, and frequently cannot be surrendered by the family either, because the household no longer owns the benefit. These arrangements are separately regulated in most states, typically by both the insurance department and the board licensing funeral directors, and they carry protections ordinary policies lack, including rules about what happens if the funeral home closes or is sold.
Spot one by looking for a funeral home named as assignee or beneficiary, an attached goods-and-services statement, and an irrevocability clause. Where the assignment was made to satisfy Medicaid rules, the irrevocability was almost certainly deliberate, and unwinding it can create an eligibility problem. That belongs with an elder law attorney, not with anyone proposing to buy the policy.
The moves that actually produce value
Work through these in order. Most readers will find something useful before reaching the end.
- Find the accelerated death benefit rider. Small whole life contracts frequently carry a terminal illness rider at no extra premium, and some add a chronic illness rider. On a qualifying diagnosis the carrier advances part of the death benefit directly — no sale, no third party, no records leaving your control. Terminal riders generally require physician certification of a life expectancy under 12 or 24 months. See the accelerated death benefit rider.
- Get the cash surrender value in writing. Burial policies accumulate slowly, but a contract in force for twenty years can hold a few thousand dollars. See cash surrender value.
- If premiums are the problem, use the nonforfeiture options. Reduced paid-up insurance applies the cash value as a single premium to buy a smaller policy that never requires another payment. Extended term insurance keeps the full face amount for a defined number of years, which suits an insured in poor health with a short horizon. Either beats lapsing.
- Record the servicing details. On a closed block, note the current servicing company name, address and policy number with your estate papers so the family can find the policy at claim time.
- Inventory the household. A burial policy is rarely the only coverage. A larger permanent contract elsewhere may be the one with real options — see selling an American National whole life policy.
Pine Lake Life Solutions reviews policies of any size and will say plainly when a sale is not realistic. It does not purchase policies and is not licensed in every state.
Frequently Asked Questions
American National is leaving the life business. Is my policy still good?
Yes. Ceasing to write new business is a strategic decision, not an insolvency, and in-force contracts remain binding obligations the company must honor. American National stated it would continue servicing existing policies without interruption. Your premium, face amount, beneficiary and guaranteed values are unchanged. What typically changes on a closed block is service turnaround, so put requests in writing and keep dated copies.
What is a guaranty association and does it cover my policy?
Every state operates a life and health insurance guaranty association funded by assessments on licensed insurers, which steps in if a member company is declared insolvent. Coverage follows each state’s statute, generally at least $300,000 in death benefits and $100,000 in net cash surrender value per insured life per company, with some states higher. A burial policy sits well below those limits. Coverage follows your state of residence.
Why will no one buy a $12,000 burial policy?
The fixed costs of a settlement transaction exceed what the policy could ever be worth to a buyer. Independent life expectancy reports, medical record retrieval, legal review, escrow and years of premium servicing cost roughly the same on a small policy as on a large one. Providers therefore set minimums, generally at $100,000 or above. A solicitation to buy a small burial policy is a reason for caution, not optimism.
How do I tell whether my policy has a graded death benefit?
Look for a provision headed graded, modified or limited death benefit. It states that death from natural causes during an initial period, usually two or three years from issue, returns premiums with interest or pays a stepped percentage rather than the full face amount, while accidental death pays in full. Note the date the period ends and keep it where the family will see it.
Should I replace my American National burial policy with a new one?
Usually not. A new simplified-issue policy restarts the graded death benefit period, so an insured in poor health could spend two or three years covered only for a return of premium. Older policies also carry premiums set at a younger issue age. Compare the benefit actually payable today and the total cost over the expected period, not the monthly premium in isolation.
What if I can no longer afford the premium?
Ask the company in writing for the current cash surrender value and for illustrations of both nonforfeiture options. Reduced paid-up insurance converts the cash value into a smaller policy requiring no further premiums. Extended term insurance preserves the full face amount for a stated number of years, which suits an insured in poor health. Either preserves value; simply stopping payment forfeits it.
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Related Reading
- Can I Sell A Final Expense Policy
- Minimum Policy Size For A Life Settlement
- What Is An Accelerated Death Benefit Rider
- What Is Extended Term Insurance
- What Is Reduced Paid Up Insurance
- What Is Cash Surrender Value
- Life Settlement Scams Red Flags
- Sell My American National Whole 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.