Yes — a Catholic Order of Foresters variable universal life certificate can generally be sold in a life settlement, because the contract belongs to you and the buyer purchases it from you; the society’s blessing on the sale itself is not required. That right traces to the Supreme Court’s 1911 decision in Grigsby v. Russell, which treated a life insurance policy as ordinary property that its owner may transfer. The practical questions are whether you and the insured qualify, and — because this is a fraternal certificate — whether the contract permits absolute assignment to a non-member owner.
Catholic Order of Foresters is a Catholic fraternal benefit society founded in 1883 and based in Naperville, Illinois. Its coverage has historically been extended to practicing Catholics who join the society, and what you hold is a member certificate rather than a policy issued by a stock insurer. That structure affects paperwork and governance. It does not, on its own, mean you cannot sell. But the assignment provision needs to be read and confirmed with the society for 2026 before anyone makes plans around a sale.
Variable universal life brings a specific complication worth understanding up front: your cash value sits in separate-account subaccounts that move with the markets. The surrender figure you saw last quarter is not the figure you will see next quarter. This page explains how buyers actually value a VUL, what to gather, and how long it takes. It is educational only — not legal, tax, or investment advice. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Catholic Order of Foresters.
In This Article
- Your Subaccount Balance Is Not What a Buyer Is Buying
- M&E Charges and the Cost-of-Insurance Drag
- Read the In-Force Illustration, Not the Sales Illustration
- The Fraternal Assignment Question
- Settlement, Surrender, or Restructure — Comparing the Exits
- Documents to Gather
- Timing, Step by Step
- Who Qualifies
- Frequently Asked Questions
Your Subaccount Balance Is Not What a Buyer Is Buying
This is the mental shift most VUL owners have to make. Inside a VUL, premium net of charges is allocated to subaccounts that function much like mutual funds — equity, bond, balanced, money market. Because those holdings are in the insurer’s separate account, they rise and fall with the market. A statement dated March and a statement dated September can show meaningfully different surrender values on the same contract.
A life settlement buyer is not acquiring an investment account. The buyer acquires the death benefit and takes on the obligation to keep the contract in force. So the valuation runs on the face amount, the insured’s life expectancy, and the projected cost of premiums going forward. Your subaccount balance matters only to the extent it offsets future premium need or sets a floor you would give up by selling.
The upshot: do not judge whether your VUL is sellable by looking at a good or bad quarter in the markets.
M&E Charges and the Cost-of-Insurance Drag
A VUL carries layered costs that a plain mutual fund does not. Mortality and expense risk charges, usually shortened to M&E, are deducted against the separate account for the insurance risk the issuer bears. Underlying fund expenses come out on top of that. Then there are policy administration charges and, most importantly, monthly cost-of-insurance deductions.
Cost of insurance is the part that catches people. It is charged on the net amount at risk — roughly the death benefit minus the account value — and it rises as the insured ages. In the insured’s 40s it is trivial. In the 70s and 80s it is not. An underfunded VUL in later years can be eating thousands of dollars a month from an account value that is not growing fast enough to cover it, which pulls the account down, which raises the net amount at risk, which raises the charge again. That spiral is a common reason VUL owners find themselves facing premium calls they never expected.
Read the In-Force Illustration, Not the Sales Illustration
The illustration you were shown at purchase is history. What matters now is an in-force illustration — a current projection run on your actual contract. Request it two ways: at current assumptions, and at guaranteed assumptions with a conservative or zero net return on the subaccounts.
The guaranteed-assumption run is the one that tells the truth. It shows the age at which the policy is projected to lapse if returns disappoint, and the premium required to prevent that. If the answer is that the policy lapses at 79 unless you triple the premium, you now have a decision to make rather than a surprise waiting for you. Our explainer on how to read an in-force illustration walks through the columns.
The Fraternal Assignment Question
Fraternal benefit societies operate under state fraternal codes rather than the standard insurance code, are member-governed rather than shareholder-owned, and are generally exempt from federal income tax under Internal Revenue Code section 501(c)(8). Catholic Order of Foresters has organized members through local units historically called courts since the 1880s.
For settlement purposes, one clause decides everything: whether the certificate allows an absolute assignment of ownership to a party who is not a member of the society. Some fraternal certificates permit it plainly. Others carry membership or insurable-interest language a buyer’s counsel will need to evaluate. It can even vary between certificate series issued in different eras.
Do not guess, and do not rely on what someone was told a decade ago. Contact member services, ask for the assignment provision applicable to your certificate, and get the answer in writing confirming the 2026 position. It is also worth knowing that fraternal certificates are commonly outside state guaranty association coverage — confirm the rule in your state.
| Charge or Feature | What It Does | Why It Matters to a Sale |
|---|---|---|
| Subaccount performance | Drives account value up or down with markets | Changes surrender value month to month; does not change the death benefit |
| M&E risk charge | Ongoing deduction for the insurance risk | Reduces net growth, raising future premium need |
| Cost of insurance | Monthly charge on the net amount at risk | Rises steeply with age and can drain an underfunded VUL |
| Surrender charge | Deducted if you cash out in early years | Lowers the surrender alternative you are comparing against |
| Death benefit | The amount paid to the beneficiary | This is the asset a settlement buyer is actually purchasing |
| Outstanding policy loan | Borrowing against account value | Repaid at closing, reducing your net proceeds |
Settlement, Surrender, or Restructure — Comparing the Exits
Before selling, put every option side by side:
- Keep and fund it. If heirs still depend on the death benefit and you can carry the premium, that is often the right answer.
- Reallocate the subaccounts. Moving to lower-volatility options can steady the account value, though it does not solve a fundamentally underfunded contract.
- Reduce the face amount. A smaller death benefit lowers the net amount at risk and therefore the cost-of-insurance drag.
- Surrender. You receive the current surrender value, which on a VUL depends on when you pull the trigger and may still carry a surrender charge in the early years.
- Life settlement. A lump sum for the whole contract, with premiums ending immediately. See settlement versus surrender.
- Retained death benefit. Some structures end your premiums while preserving a portion of the death benefit for beneficiaries — see the policy options.
The GAO’s market study (GAO-10-775) found sellers typically received about 10% to 35% of face value, commonly several times what surrender would have paid. That does not guarantee your result, but it is the honest reference range.
Documents to Gather
Start with the certificate cover page — the first page listing the society, certificate number, face amount, issue date, and insured. That single page is enough for a free review. To go further, assemble:
- Your most recent annual and quarterly statements, showing account value, surrender value, subaccount allocations, and any loan.
- An in-force illustration at current and guaranteed assumptions.
- The prospectus or contract pages describing M&E charges and surrender charge schedule.
- The assignment provision, or written confirmation from the society.
- A signed medical records authorization for life expectancy underwriting.
If a policy loan is outstanding, note it. Loans are settled at closing and reduce net proceeds.
Timing, Step by Step
Expect roughly 60 to 120 days end to end. Weeks one and two: cover page submitted, authorizations signed, records and illustration requested. Weeks three through six: medical records arrive and independent underwriters produce a life expectancy estimate. Weeks six through ten: the case is presented to licensed institutional buyers and offers come back. Final stretch: you accept or decline, closing documents are executed, funds go into escrow, the society records the ownership change, and escrow releases payment.
Two things stretch this timeline more than anything else — slow physician offices and, on fraternal cases, the extra assignment review. Neither costs you money; a review carries no fee and no obligation.
Who Qualifies
The general profile: an insured in their senior years, a death benefit of $100,000 or more, and some change in health or need since the certificate was issued. Rising VUL premiums are one of the most common triggers for a review, because the contract that made sense at 55 can become unaffordable at 78 through no fault of the owner.
If your certificate is well under $100,000 — the size range of many fraternal and final-expense contracts — a settlement is unlikely to be workable, and we will say so directly rather than waste your time. For a broader picture of eligibility, read what policies qualify for a life settlement and whether a life settlement is worth it.
To get a straight answer on your own certificate, send the cover page for a free, no-obligation policy review, or call (305) 209-7183.
Frequently Asked Questions
Can I sell a VUL if my subaccounts are down this year?
Yes, and a down market does not necessarily hurt your position. Buyers price the death benefit and the projected premium load, not the current subaccount balance. A weak account value mainly lowers the surrender alternative you would be comparing the offer against.
Does Catholic Order of Foresters have to approve the sale?
The society does not approve the sale itself, since the contract is your property. What must be confirmed is whether your certificate permits absolute assignment of ownership to a non-member. Request that provision in writing from member services and confirm the position as of 2026.
Why do my VUL premiums keep climbing?
Cost of insurance is charged on the death benefit minus the account value and rises as the insured ages. If subaccount returns have not kept pace, the account value falls, the amount at risk grows, and the charge grows with it. An in-force illustration at guaranteed assumptions will show where that leads.
What are M&E charges?
Mortality and expense risk charges are ongoing deductions taken against the separate account to compensate the issuer for insurance risk and expenses. They sit on top of the underlying fund expenses. Together they are a meaningful drag on long-run account growth.
How much might I receive?
The GAO’s study of the market (GAO-10-775) found sellers typically received roughly 10% to 35% of face value. Your figure depends on the insured’s life expectancy, the face amount, and the premiums required to keep the contract in force. A free review is the only way to get a number specific to your certificate.
How long does it take to sell?
Usually about 60 to 120 days from first contact to funded closing. Medical records retrieval is the most common delay, and fraternal certificates can add time for the assignment review. There is no cost to start and no obligation to accept an offer.
What if my certificate is only $50,000?
Buyers in the secondary market generally focus on death benefits of $100,000 or more, because underwriting, legal, and closing costs do not shrink with the face amount. A smaller certificate is usually better kept, reduced, or evaluated against a paid-up option if the contract offers one.
Is Pine Lake affiliated with the society?
No. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Catholic Order of Foresters. This page provides general education only and is not legal, tax, or investment advice. Send the certificate cover page for a free review or call (305) 209-7183.
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Related Reading
- What Is An In Force Illustration
- Life Settlement Vs Surrender
- How It Works Policy Options
- What Policies Qualify For Life Settlement
- Is A Life Settlement Worth It
- Sell My Catholic Order Forester 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.