Yes – you can sell an Auto-Owners Life whole life policy through a life settlement. The contract is your personal property, the buyer purchases it from you, and the insurance company’s permission is not needed; Auto-Owners is not a party to your decision. Every carrier’s policy can be sold if the policyholder and the policy qualify, and buyers generally look for an insured in their senior years with a death benefit of $100,000 or more.
Whole life gives you something most policy types do not: a hard benchmark. Your contract carries a guaranteed cash surrender value that grows on a published schedule, plus dividends and paid-up additions if the policy is participating. A settlement is worth doing only if it pays meaningfully more than that surrender number – and for qualifying policies it often does.
One quirk trips up a lot of owners here. Auto-Owners Life Insurance Company is the life subsidiary of Michigan-based Auto-Owners Insurance, a mutual property-and-casualty group founded in 1916 and headquartered near Lansing. The group sells exclusively through independent agents and does not sell direct, and life is a secondary line for it. So people are frequently surprised to learn that their life carrier is the same company that insures their car and house – and that life servicing runs through a different department and often a different phone number than claims on the auto policy. Confirm the 2026 A.M. Best rating and the correct life service line with the company. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Auto-Owners Insurance or Auto-Owners Life Insurance Company.
In This Article
- Same Company, Different Department: Where to Call
- Reading the Cash Surrender Value Line
- How Dividends and Paid-Up Additions Change the Picture
- Policy Loans Reduce What Reaches You
- The Full Menu of Exits
- Documents, Steps, and Realistic Timing
- Verify Ownership and Beneficiary Before You Start
- Taxes, Benefits, and Where This Page Stops
- Frequently Asked Questions
Same Company, Different Department: Where to Call
Because Auto-Owners is best known for auto and home coverage, life policyholders often start by calling the number on their auto insurance card – and get routed to people who cannot see the life contract at all.
Find the life servicing number on your annual life statement or premium notice, not on your auto ID card, and ask specifically for the life department. When you reach them, request three things in writing: a current statement of values, an in-force illustration, and confirmation of the current owner and beneficiary of record.
Your independent agent is another route, since Auto-Owners distributes only through independent agencies. But be aware that the agent who wrote the policy decades ago may have retired or sold the agency, and the servicing agent of record may be someone you have never met. Going directly to the carrier’s life department is usually faster.
Reading the Cash Surrender Value Line
The entire decision rests on one figure that most people have never located. On your annual statement, find:
- Face amount. What pays at death – not what a settlement pays.
- Guaranteed cash value. The contractual figure for this policy year, matching the table of values printed in your contract.
- Paid-up additions. Extra coverage purchased with dividends, adding both death benefit and cash value.
- Dividend accumulations. Dividends left on deposit earning interest.
- Loan balance and accrued interest. Subtracted from anything you receive.
- Net cash surrender value. The actual check if you surrender today.
That last number is your benchmark. Any settlement offer should be judged against it, not against the death benefit. See how cash surrender value works for a fuller walkthrough.
How Dividends and Paid-Up Additions Change the Picture
If your policy is participating, dividends are not guaranteed but have historically been declared year after year by mutual and mutual-style carriers. What you elected to do with them shapes the math today.
Additions purchased with dividends raise both the death benefit and the cash value, which generally helps a settlement because the payout the buyer is underwriting is larger. Dividends applied to reduce premium lower your out-of-pocket cost – and lower the buyer’s carrying cost too. Dividends taken in cash do neither.
The counterintuitive part: an unusually rich cash value relative to the face amount can compress an offer. A buyer profits on the gap between what they lay out and what eventually pays, so when surrender value is already a large share of the death benefit, the spread narrows. Policies with a large death benefit, manageable premiums, and moderate cash value tend to price best.
Policy Loans Reduce What Reaches You
Whole life makes borrowing simple, and unpaid loan interest has a way of compounding out of sight. Years later the balance can be a meaningful slice of the cash value.
In a settlement, an outstanding loan is generally satisfied out of the transaction, which reduces the net cash you receive at closing. Ask the life department for a dated payoff figure before evaluating any offer, and ask whether interest is charged in advance or in arrears – it changes the number.
There is also a tax angle: loan relief in a sale can be treated as income to you. That is a question for a CPA, not something a policy statement will answer.
| Exit Option | What You Receive | Coverage Afterward | Best When |
|---|---|---|---|
| Keep paying premiums | Nothing now | Full death benefit continues | Heirs still depend on it and premiums are comfortable |
| Reduced paid-up insurance | No cash; premiums end | Smaller fully paid death benefit | You want coverage without the premium |
| Policy loan | Loan against available cash value | Benefit reduced by loan plus interest | Short-term need, policy retained |
| Full surrender | Net cash surrender value | None | Policy too small for the secondary market |
| Life settlement | Lump sum, typically 10-35% of face value (GAO-10-775) | None | Coverage no longer needed; cash needed now |
| Retained death benefit | No cash; premiums end | You keep a portion for heirs | You want the premium gone but not all the coverage |
The Full Menu of Exits
Compare every path against your actual goal before selling:
- Reduced paid-up insurance. Stop paying premiums, keep a smaller fully paid death benefit. If ending the premium is the whole objective, this may be the answer and no sale is needed.
- Extended term. Use the cash value to buy term coverage at the current face amount for a fixed number of years.
- Policy loan or partial surrender. Cash now, coverage preserved, at the cost of interest and a smaller benefit.
- Full surrender. Fast and simple, and normally the lowest payout available.
- Life settlement. A lump sum for the contract, typically 10% to 35% of face value and on average several times cash surrender value (GAO-10-775).
- Retained death benefit. Premiums end while you keep a share of the coverage – see how the options compare.
A settlement tends to win when the coverage is no longer needed, the premium has become a strain, or a lump sum is needed for care costs. It loses when heirs still depend on the full benefit and the premium is comfortable.
Documents, Steps, and Realistic Timing
Start with the policy cover page – insurer, policy number, face amount, issue date. That single page is enough for a free policy review; send it in or call (305) 209-7183.
To reach an offer, add the most recent annual statement, an in-force illustration from the life department, a dated loan payoff figure, and a HIPAA authorization so independent underwriters can estimate life expectancy. Read the authorization before signing – it should be specific and revocable.
The transaction generally runs 60 to 120 days. Screening takes days; carrier documents and medical records take two to six weeks; then pricing, written offers, contracts, and closing. Funds should sit with an independent escrow agent and be released only when the ownership change is recorded – never sign over ownership against a promise of later payment. Most states then provide a rescission window during which you can unwind the sale.
Verify Ownership and Beneficiary Before You Start
Policies written through independent agencies decades ago often carry stale designations. The owner of record may be a former spouse, a parent who has since died, a family business, or a trust that was later restated. The beneficiary may be someone you have not spoken to in twenty years.
None of this blocks a settlement, but all of it slows one down, and some of it must be resolved before a transaction can close. If a trust owns the policy, the trustee controls any sale and the trust document governs what may be done with proceeds – that is a legal question for the drafting attorney.
Ask the life department for written confirmation of the current owner and beneficiary of record as of 2026, and fix anything that is wrong before you go further. Our overview of what policies qualify covers the other threshold criteria.
Taxes, Benefits, and Where This Page Stops
Settlement proceeds are not automatically tax-free. The general framework, clarified in the 2017 Tax Cuts and Jobs Act, treats proceeds up to your tax basis as a return of premium, the amount between basis and cash surrender value as ordinary income, and anything above that as capital gain. On a whole life policy held for decades, both basis and gain can be substantial.
A lump sum may also count as a resource for means-tested programs such as Medicaid, and receiving it in the wrong month can disrupt eligibility. This page is educational only and is not legal, tax, or investment advice. Take the actual statements to a CPA, and to an elder law attorney if benefits are involved.
Frequently Asked Questions
Does Auto-Owners have to approve the sale of my policy?
No. A life insurance policy is personal property and a life settlement is a private sale between you and the buyer. The carrier’s role is limited to recording the change of owner and beneficiary after closing. Auto-Owners is not a party to the decision and cannot block it.
I bought my auto insurance from Auto-Owners. Is my life policy the same company?
Auto-Owners Life Insurance Company is the life subsidiary of the Michigan-based Auto-Owners Insurance group, which sells exclusively through independent agents. Life is a secondary line for the group, and it is serviced by a different department than auto or home coverage. Use the number on your life statement, not your auto ID card.
Where do I find my cash surrender value?
It appears on the annual life statement, usually labeled net cash surrender value, and the guaranteed schedule is printed in the contract. Take the guaranteed value plus paid-up additions and dividend accumulations, then subtract any loan balance and accrued interest. Ask the life department for a written values quote if the statement is unclear.
Will a settlement pay more than surrendering the policy?
For policies that qualify, usually yes. Federal research on the market (GAO-10-775) found sellers typically received roughly 10% to 35% of face value, and on average several times cash surrender value. The only way to know for your contract is to compare a written offer against a current surrender quote.
What happens to my policy loan if I sell?
The loan is generally satisfied out of the transaction, reducing the net cash you receive at closing. Request a dated payoff figure before evaluating offers, and speak with a CPA about the tax treatment, since loan relief can be taxable to you.
My agent retired. Who do I contact?
Auto-Owners distributes only through independent agencies, so the agent who wrote your policy may have retired or sold the agency and the servicing agent of record may be someone new. Contacting the carrier’s life department directly is usually faster than tracking down the agency.
Should I consider reduced paid-up insurance instead of selling?
It is worth pricing. Reduced paid-up lets you stop paying premiums and keep a smaller, fully paid death benefit, which may be right if your goal is ending the premium rather than raising cash. A settlement makes more sense when you need a lump sum or no longer need the coverage at all.
How do I get a free policy review?
Send the policy cover page listing the insurer, policy number, face amount, and issue date, or call (305) 209-7183. The review is free and carries no obligation, and you will get a candid answer about whether the policy is a realistic candidate before any medical records are requested.
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
- Life Settlement Vs Surrender
- What Policies Qualify For Life Settlement
- How It Works Policy Options
- Is A Life Settlement Worth It
- How Much Can I Get For My Life Insurance 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.