Yes — an Auto-Owners Life term policy can be sold in a life settlement if you and the policy qualify, but for term there is almost always one extra step first: the term coverage has to be convertible to permanent insurance. The buyer purchases the contract from you, so the carrier’s permission is not needed and Auto-Owners Life is not a party to your decision. What the carrier does control is the conversion privilege written into your contract — and that privilege has a deadline.
This is the most time-sensitive page on the site for a reason. Conversion rights expire quietly. There is no phone call, no certified letter, no warning. One day the option is in the contract and the next day the anniversary has passed and it is gone, along with any chance of turning the policy into cash.
Auto-Owners Insurance is a Michigan-based mutual group founded in 1916 that sells only through independent agents; Auto-Owners Life Insurance Company is its life subsidiary. Because life is a secondary line for a group best known for auto and home coverage, many families do not realize they hold term insurance with the same company that insures the car. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Auto-Owners.
In This Article
Why Term Alone Usually Cannot Be Sold
Term insurance is rented coverage. You pay for a defined period — 10, 15, 20, or 30 years — and if the insured is alive at the end, the policy simply stops. There is no cash value, no savings account, nothing to surrender.
A settlement buyer needs a policy that can be kept in force for the rest of the insured’s life. A term policy that expires in four years cannot deliver that, so on its own it has little market value. The exception is the conversion privilege: most term contracts let the owner exchange the term coverage for a permanent policy from the same insurer, with no new medical exam and no new health questions. Once that conversion happens, you own permanent coverage — and permanent coverage is sellable.
So the honest sequence for term is: check the conversion right, convert, then settle. Anyone who tells you a plain non-convertible term policy has significant market value is overselling.
Find Your Conversion Deadline Today, Not Next Month
Conversion deadlines are written two ways, and your contract may use either or both:
- Age-based. Conversion is allowed until the insured reaches a stated age — often somewhere in the 65 to 70 range, depending on the product and issue year.
- Duration-based. Conversion is allowed only during a set portion of the level term period, such as the first several years or up to a specific policy anniversary.
Whichever applies, the date is in your policy under a heading like Conversion Privilege or Right to Exchange. If you cannot find the contract, ask Auto-Owners Life directly — or ask the independent agency that wrote the policy, since Auto-Owners distributes exclusively through independent agents and your agency can pull the file. Confirm the current life-service phone line with the carrier as of 2026; the number for life service is not necessarily the number printed on your auto policy.
Get the answer in writing. “I think you have until 70” is not good enough when the whole decision turns on the date.
What Conversion Actually Gives You
When you convert, the new permanent policy is issued at your current age but at the health class from your original term underwriting. That is the valuable part: if your health has declined since the policy was issued, you are converting on old, better terms.
It also means the premium jumps — often sharply, because permanent coverage at an older age costs far more than term. That premium shock is exactly why so many converted policies end up sold rather than kept. You are not converting because you want to pay the new premium for thirty years. You are converting because the permanent contract is the asset a buyer can purchase.
Ask the carrier which permanent products your term policy can be converted into, whether a partial conversion is allowed (converting only part of the face amount), and what the premium would be for each option. A buyer’s offer depends heavily on which permanent product you land in — a guaranteed universal life chassis is typically far more attractive than a richly funded whole life contract.
| Situation | Can It Be Sold? | What To Do Now |
|---|---|---|
| Convertible term, deadline still open, insured 65+ | Usually yes, after conversion | Get conversion quotes and a policy review immediately |
| Convertible term, deadline within 12 months | Yes, if you act | Treat as urgent – the option disappears silently |
| Conversion expired, insured in ordinary health | Rarely | Decide whether to keep or drop the coverage |
| Conversion expired, serious health impairment | Sometimes | Still worth a free review |
| Term rider on a permanent policy | Depends on the base policy | Review the full contract, not just the rider |
The Health Exception
There is a second path to value with term coverage: significant health impairment. Life settlement pricing rests on life expectancy, so a seriously ill insured can make even an awkward policy worth pursuing — and in some cases a life settlement or a viatical arrangement is available where an ordinary sale would not be.
If the insured has been diagnosed with a serious condition, do not assume the term policy is worthless because it has no cash value. Have the conversion language reviewed quickly, because the combination of an open conversion right and an impaired health profile is where term policies produce their largest outcomes. Time is the enemy in both directions here: conversion deadlines run, and so does the policy’s remaining level-term period.
Documents and Process for a Term Case
Term files look a little different from permanent-policy files because the conversion question comes first.
- Policy cover page. Insurer, policy number, face amount, issue date. This alone is enough for a free review.
- The conversion provision. The page of the contract stating the deadline and the products available.
- Current premium notice. Shows what you are paying and through what date.
- Quotes for the converted policy. The permanent premium at your current age.
- HIPAA authorization. So life expectancy can be estimated once the file is live.
After conversion, the process is the same as any permanent policy: underwriting, offers, contracts, independent escrow, ownership change with Auto-Owners Life, funding, and a state rescission window. Budget 60 to 120 days overall, plus the conversion time before it. Keep paying every premium until the money is actually in your account.
What a Term Sale Can Realistically Pay
Once a term policy is converted and sold, the pricing follows the ordinary market. GAO research on the secondary market (GAO-10-775) found sellers typically received roughly 10% to 35% of face value, and roughly four to eight times what surrendering would have paid — though term itself has no surrender value, so the comparison for you is simply lump sum versus letting the coverage lapse for nothing.
That is the core argument for acting: the default outcome for an unwanted term policy is that it expires and pays nothing to anyone. A conversion plus settlement can convert that zero into a real number. Our guide to how much you can get for a life insurance policy walks through what drives the range.
Your Options If Conversion Has Already Closed
If the deadline has passed and the insured is in ordinary health, be realistic: there is probably nothing to sell. That is not a reason to keep paying for coverage you do not need, and it is not a reason to drop coverage you do need. Weigh whether the family still relies on the death benefit, whether the level-term period has years left at the current premium, and whether replacing coverage is even possible at your age and health.
If the insured has a serious health condition, get the file reviewed anyway — the answer sometimes changes. And if you hold other Auto-Owners Life coverage, permanent policies are a different story entirely; see the guides for universal life and guaranteed universal life. For a free, no-obligation review, send the policy cover page or call (305) 209-7183. This page is educational only and is not legal, tax, or investment advice.
Frequently Asked Questions
Can I sell an Auto-Owners Life term policy that has no cash value?
Usually only after converting it to permanent coverage. Term with no cash value and a fixed expiration date offers a buyer nothing to hold for life. If your contract still allows conversion, the converted permanent policy is what gets sold.
How do I find my conversion deadline?
It is in the policy contract under a heading such as Conversion Privilege or Right to Exchange, and it is typically stated as an age or a policy duration. If you cannot locate the contract, request it from Auto-Owners Life or from the independent agency that sold you the policy, and ask for the deadline in writing.
Will I need a new medical exam to convert?
Generally no. The point of a conversion privilege is that it lets you move to permanent coverage without new underwriting, using the health class from your original policy. Confirm the specific terms with the carrier, since provisions vary by product and issue year.
Does converting cost me anything up front?
There is normally no fee to convert, but the permanent premium at your current age will be much higher than the term premium. That is why many people convert and then sell rather than converting and keeping the policy. Get the new premium quoted before you commit.
Do I have to tell Auto-Owners Life that I plan to sell?
No. You are entitled to convert under the contract terms and you are entitled to sell your own property. The carrier’s role is administrative: it issues the converted policy and later records the ownership change once a sale closes.
How long does the whole term-to-settlement path take?
Allow a few weeks for conversion, then 60 to 120 days for the settlement itself. Both stages depend on how quickly documents and medical records arrive. Keep paying premiums the entire time, because a lapse ends the process.
My term policy expires in two years. Is it worth a call?
Yes, if it is still convertible. A short remaining term period does not matter once the coverage is converted to permanent insurance, but it does mean the window to act is closing. A free review of the cover page takes very little effort on your part.
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
- What Policies Qualify For Life Settlement
- How Much Can I Get For My Life Insurance Policy
- How It Works Policy Options
- Education Center
- Sell My Auto Owners Life Universal Life Policy
- Sell My Auto Owners Life 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.