Yes. An American National universal life policy can be sold in a life settlement, and the carrier’s approval is not part of the transaction; the buyer purchases the contract from you. Universal life is in fact the single most common policy type in the secondary market, for a reason that has nothing to do with any one insurer.
UL policies sold in the 1980s through the early 2000s were illustrated at interest rates of 8% to 12%. Those illustrations assumed the credited rate would carry the policy for life. It did not. Most of those contracts have been crediting at or near their guaranteed minimum for years while the internal cost of insurance climbs with the insured’s age.
The result is a policy that quietly runs out of money in the owner’s 70s or 80s unless premiums rise sharply. This guide shows how to find your lapse date and what to do about it. Pine Lake Life Solutions is not affiliated with American National.
In This Article
- The ANICO Backstory Behind Many of These Policies
- Why Old Universal Life Policies Are Failing
- Request an In-Force Illustration at Two Assumptions
- How the Lapse Date Drives Your Options
- What Buyers Look For in a UL Contract
- Documents and Timeline
- When Keeping or Fixing the Policy Is the Better Answer
- Frequently Asked Questions
The ANICO Backstory Behind Many of These Policies
American National, founded in Galveston, Texas, distributed through a multiple-line agent force that sold life, annuity, health, and property-casualty coverage. A great many universal life policies were written by the same agent who handled a family’s auto, home, or farm insurance. That is why so many owners cannot remember choosing a life insurer at all.
The company was acquired by Brookfield Reinsurance in 2022. Verify the 2026 servicing entity name and the carrier’s current A.M. Best rating directly, and use the policyholder service number printed on your latest statement rather than an old agent’s business card.
Why Old Universal Life Policies Are Failing
Universal life separates the account value from the cost of insurance. Premiums go into an account that earns a credited rate; monthly charges for insurance and expenses come out. When the credited rate assumed at sale was 9% or 10% and the actual rate has been near the guaranteed floor for two decades, the account value is a fraction of what the original illustration projected.
Meanwhile the cost-of-insurance charge rises every year with the insured’s age. Past age 75 those charges accelerate steeply. Eventually the monthly deductions exceed what the account can absorb, the account value hits zero, and the policy lapses unless the owner writes much larger checks. Owners often have no warning until a lapse notice arrives.
Request an In-Force Illustration at Two Assumptions
This is the single most useful thing a UL owner can do. Ask the carrier in writing for an in-force illustration run at the current credited rate and current charges, and a second one at the guaranteed minimum rate and maximum guaranteed charges. Both are free and the carrier is generally required to provide them on request.
The guaranteed-assumption version shows the earliest year the policy can lapse. The current-assumption version shows the likely year. If either date falls inside the insured’s realistic life expectancy, the policy is on a path to deliver nothing, and that is exactly the situation a settlement exists to solve.
| Illustration Scenario | What It Shows | Why You Need It |
|---|---|---|
| Current credited rate, current charges | Likely lapse year if nothing changes | Your realistic planning date |
| Guaranteed minimum rate, maximum charges | Earliest possible lapse year | The worst case the contract allows |
| Premium solve to age 100 | Annual premium needed to carry the policy | Tells you the true cost of keeping it |
| Reduced face amount solve | Smaller benefit at a sustainable premium | Alternative if coverage is still needed |
How the Lapse Date Drives Your Options
Once you know the projected lapse year, the options sharpen. You can pay more premium to push the date out, reduce the face amount so the cost of insurance falls, surrender for whatever account value remains, or sell the policy.
Here is illustrative math. A hypothetical $300,000 UL with $18,000 of account value, projected to lapse in six years without an increase, is a policy whose surrender check is $18,000 and whose expected payout is zero if nothing changes. Against that backdrop, a settlement offer of $55,000 is a very different proposition than it looks like next to a $300,000 face amount. Those numbers are hypothetical.
What Buyers Look For in a UL Contract
Buyers want a death benefit of $100,000 or more, an insured generally in their late 60s or older or younger with a meaningful health impairment, a policy past the contestability period, and a manageable premium to carry the contract to maturity. A UL with low guaranteed charges is easier to underwrite than one with aggressive guaranteed maximums.
The federal GAO study of the market (GAO-10-775) reported a historical range of roughly 10% to 35% of face value, and settlements have commonly paid several multiples of surrender value. No one can promise a number before medical underwriting is complete.
Documents and Timeline
Send the policy cover page first; it identifies the owner, insured, face amount, and policy number. Add the latest annual statement, a current premium notice, and both in-force illustrations. If there is a loan against the policy, ask for a payoff figure as of a stated date.
From the first review to funding, plan on roughly 60 to 120 days. Medical record retrieval is normally the bottleneck. After funding, most states give the seller a rescission period in which the sale can be unwound by returning the proceeds; confirm the rule that applies to you.
When Keeping or Fixing the Policy Is the Better Answer
If someone still depends on the death benefit, the first move is usually to make the policy sustainable rather than to sell it. Reducing the face amount can cut the cost of insurance enough to stabilize the account. A 1035 exchange into a guaranteed no-lapse product can lock in a smaller but certain benefit.
Selling makes sense when the coverage is no longer needed, when the premium has become a genuine hardship, or when cash is needed now for care costs or a Medicaid spend-down. Run the decision past your own tax and legal advisors before you sign anything.
Pine Lake Life Solutions reviews policies with a death benefit of $100,000 or more and typically pays more than cash surrender value. Send the policy cover page for a free policy review, or call (305) 209-7183. This page is educational only and is not legal, tax, or investment advice.
Frequently Asked Questions
Why is universal life the most common type sold?
Older UL policies were illustrated at 8% to 12% interest and have credited near their guaranteed minimum for years, while the internal cost of insurance rises with age. That combination pushes many policies toward lapse in the owner’s 70s or 80s, making a sale more attractive than losing the policy for nothing.
How do I find out when my policy will lapse?
Ask the carrier for an in-force illustration at current assumptions and another at guaranteed assumptions. The guaranteed version shows the earliest possible lapse year and the current version shows the likely one.
Does American National have to consent to a sale?
No. The buyer purchases the contract from you and the carrier simply records the ownership and beneficiary change. Grigsby v. Russell confirmed the owner’s right to transfer a policy in 1911.
Who owns American National today?
Brookfield Reinsurance acquired American National in a deal completed in 2022. Verify the current servicing entity and A.M. Best rating with the carrier, since post-acquisition names can change.
Can I sell if my account value is almost gone?
Often yes. A nearly depleted account value hurts a surrender, not necessarily a settlement, because buyers price the death benefit and the premium needed to keep it in force. It does mean the carrying cost is higher, which can lower an offer.
What if I bought the policy from my auto insurance agent?
That was common with American National’s multiple-line agents. It changes nothing about your rights. Work from the policy number on your statement and call the policyholder service number printed there.
Is a settlement taxable?
Part of the proceeds can be taxable depending on your cost basis and the policy’s cash value, and federal rules changed in 2017. Ask a CPA about your specific numbers before closing.
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Related Reading
- What Policies Qualify For Life Settlement
- Life Settlement Vs Surrender
- How It Works Policy Options
- What Is Cash Surrender Value
- Sell My American National Whole Life Policy
- Sell My American National Guaranteed Universal 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.