July 31, 2026
4:59 pm

Can I Sell My Colonial Life Term Life Policy? (2026 Guide)

Yes — a term life policy can be sold, including one issued by Colonial Life, as long as you and the policy qualify; the buyer purchases the contract and the carrier’s permission is not needed. With term, though, “qualify” carries a specific and time-sensitive meaning that trips up most owners.

Term insurance has no cash value. There is no savings account inside it, nothing to surrender, and nothing to borrow against. When the level period ends, the coverage either becomes very expensive or simply stops. That means the only thing a buyer can purchase is a permanent policy — so in most cases a term policy has to be converted to permanent coverage first, and the conversion privilege is what makes the whole thing possible.

Conversion deadlines expire silently. Nobody calls you. Colonial Life & Accident Insurance Company, headquartered in Columbia, South Carolina, is Unum’s voluntary-benefits brand and sells its term coverage largely at the worksite, so your specific conversion terms live in your own contract or certificate. Read them now, not later. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Colonial Life or Unum.

In This Article

Find the Conversion Provision Today
Why Conversion Is Usually Required Before a Sale
Colonial Life’s Worksite Model and Portability
The Face Amount Question
When Health Changes the Calculation
Step-by-Step: Term to Cash
Timing: Two Deadlines, One Plan
What Sellers Actually Receive, and Where to Read Next
Frequently Asked Questions

Can I Sell My Colonial Life Term Life Policy? (2026 Guide)

Find the Conversion Provision Today

Open your policy or certificate and look in the table of contents for a section called Conversion, Conversion Privilege, or Right to Convert. It will tell you three things: whether you can convert, until when, and into what.

Deadlines are usually written one of two ways. Some contracts allow conversion until a stated attained age — age 65 and age 70 are both common industry benchmarks. Others allow it for a set number of policy years, or until some point before the end of the level term period. Whichever applies, the date is fixed, it passes without notice, and once it passes the right is gone permanently. If you cannot find the language or cannot interpret it, call the servicing number on your premium notice and ask them to state your conversion deadline in writing.

Why Conversion Is Usually Required Before a Sale

A life settlement buyer is making a long-term purchase: they take over the premiums and eventually collect the death benefit. Term coverage does not support that. It expires, often long before the insured’s life expectancy, and after the level period the renewal premiums climb so steeply that continuing is uneconomic.

Conversion solves this. It exchanges the term contract for a permanent one — typically universal life or whole life — issued by the same insurer, with no new medical underwriting. That last point is critical: someone whose health has declined since the term policy was issued cannot buy new coverage at any reasonable price, but they can still convert at their original health class. That is exactly the profile the secondary market values most.

Colonial Life’s Worksite Model and Portability

Colonial Life has operated from Columbia, South Carolina since 1939 and has been part of Unum Group since the 1990s. Its business is voluntary benefits enrolled at the workplace through independent contracted agents, sitting alongside accident, disability, critical illness and hospital indemnity coverage. Life products in that channel are typically term or small whole life, often with portability so the employee keeps coverage after leaving the job.

Portability and conversion are different rights and are easily confused. Portability means you keep the same term coverage and start paying the premium yourself. Conversion means you exchange it for permanent coverage. Only conversion produces a policy that the secondary market can work with. As of 2026, verify which rights your specific certificate carries, along with any deadline, directly with the servicing center — terms differ by employer plan and by state.

The Face Amount Question

Worksite term is often issued in amounts sized to a salary multiple or to a payroll-deduction budget. If your Colonial Life term coverage is $25,000 or $50,000, converting it will produce a permanent policy of the same modest size, and that is below what the secondary market can economically transact. Buyers generally start at $100,000 in death benefit because the underwriting, life-expectancy reporting, legal and escrow costs of a settlement are roughly fixed.

Check the face amount before you spend energy on anything else. Some contracts also limit how much of the term face amount may be converted, or allow conversion in stages. Ask about that specifically. See what policies qualify for the general screen.

What you do with convertible term	Coverage after	Money to you	Deadline sensitive?
Let it expire	None	$0	Yes — permanently
Renew annually after level period	Term, rising cost	$0	No, but cost climbs fast
Port the coverage	Same term, self-paid	$0	Yes, short window
Convert and keep	Permanent policy you own	$0 now, benefit at death	Yes
Convert, then settle	Buyer owns the policy	Lump sum if it qualifies	Yes — convert first

When Health Changes the Calculation

Life settlement pricing rests on an estimate of life expectancy. A shorter estimate means the buyer expects to pay premiums for less time, which raises what they can offer. So a serious health impairment, while nobody’s preference, materially changes what a converted policy is worth.

There is also a distinct arrangement for people facing a terminal or chronic illness — a viatical settlement — which has its own tax treatment and its own rules. If that is your situation, say so early in any conversation, and speak with your own tax professional. Nothing here is legal, tax or investment advice.

Step-by-Step: Term to Cash

Locate the conversion deadline. Contract language first, servicing center second, in writing.
Confirm the face amount and whether the full amount is convertible.
Get a free policy review before converting. Send the policy cover page. There is no reason to convert into an expensive permanent premium if the policy would not be a settlement candidate anyway.
Convert if it makes sense, using the carrier’s form. No medical exam is required for a contractual conversion.
Request an in-force illustration on the new permanent policy at both current and guaranteed assumptions.
Review offers in writing, close through independent escrow, and let the carrier record the ownership change before funds release.

Timing: Two Deadlines, One Plan

The conversion deadline is hard. The settlement process is slow. That combination is what catches people. A settlement typically runs 60 to 120 days end to end, with medical record retrieval as the usual bottleneck, and the conversion has to be complete before that clock even starts.

If your conversion deadline is more than a few months out, there is time to get a free review first and convert only if the answer is encouraging. If the deadline is weeks away, the safer sequence is often to convert — preserving the option — and evaluate afterward. An expired conversion right cannot be restored by anyone at any price.

What Sellers Actually Receive, and Where to Read Next

No honest page can promise a number. Published research on the market, including the GAO’s study (GAO-10-775), found sellers commonly received in the range of 10% to 35% of face value — and since term has no surrender value at all, the comparison for term owners is against zero. Letting a convertible term policy expire returns nothing.

If you also hold Colonial Life coverage of another kind, the analysis is different: see whole life, universal life, and the broader education center, plus how offers are estimated. To start, send the policy cover page for a free policy review or call (305) 209-7183.

Frequently Asked Questions

Can I sell a term policy without converting it?

Only rarely. Because term expires and has no cash value, buyers almost always require conversion to permanent coverage first. The main exception involves an insured with a serious health impairment, where a specialized transaction may be possible; that should be discussed case by case.

How do I find my conversion deadline?

Look for the conversion provision in your policy or certificate. It will state either an attained age or a number of policy years. If the language is unclear, call the servicing number on your premium notice and ask for the deadline in writing.

Does conversion require a medical exam?

No. A contractual conversion privilege lets you exchange term for permanent coverage at your original health classification without new underwriting. That is what makes it valuable to someone whose health has declined.

Will the converted premium be affordable?

It will be much higher than the term premium, because permanent coverage at your current age costs more. That is precisely why many people who convert then sell: the settlement lump sum arrives and the premium obligation transfers to the buyer.

Should I convert before or after getting a review?

If your deadline is months away, get the free review first so you are not paying for a conversion that leads nowhere. If the deadline is close, converting preserves an option that cannot be recovered once it lapses.

Does Colonial Life have to approve a sale?

No. Once you own a permanent policy, transferring it is your decision as owner. The carrier only records the change of owner and beneficiary after closing. The conversion itself, by contrast, does go through the carrier’s own form and deadline.

My term coverage is $50,000. Is that enough?

Usually not. Buyers generally work with policies of $100,000 or more because transaction costs do not scale down with policy size. A converted policy at that face amount is unlikely to attract offers.

How fast can this be done?

Conversion itself is usually quick once the form is filed. The settlement that follows typically takes 60 to 120 days, with medical record collection as the slowest step. Send the policy cover page or call (305) 209-7183 to start.

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