Yes — a Delaware Life variable universal life policy can be sold in a life settlement, because any carrier’s policy can be sold when the policyholder and the policy qualify. The buyer purchases the contract from you. Delaware Life’s permission is not needed and the company has no say in whether you sell; it records the ownership change after the transaction closes.
VUL is different from every other policy type in one important way: the cash value is invested in separate-account subaccounts that rise and fall with the markets. The surrender value your statement showed in January is not the surrender value in June. That moving target confuses sellers, and it is why VUL owners often misjudge what their policy is really worth.
Below: who Delaware Life is, how the internal charges inside a VUL work against you as you age, what buyers actually pay for, and what to collect before asking anyone for a number.
In This Article
- First, the Company: Delaware Life and the Sun Life Connection
- Why Your VUL Surrender Value Keeps Moving
- M&E Charges and the Cost-of-Insurance Drag
- What a Buyer Is Actually Valuing
- Settlement Versus the Other Exits
- Documents to Gather Before You Ask for a Number
- Timing, Escrow, and Closing
- Who Qualifies
- Frequently Asked Questions
First, the Company: Delaware Life and the Sun Life Connection
Delaware Life Insurance Company came into being in 2013 through the acquisition of Sun Life Financial’s U.S. annuity business and certain U.S. life blocks by Guggenheim-affiliated investors; the company later sat within the Group 1001 family. Its business is annuity-heavy, with a legacy life insurance component that came along in that deal.
Practically, that means a policyholder who bought a variable universal life contract from a Sun Life representative in the U.S. before 2013 may now be a Delaware Life contract holder. Corporate ownership and financial-strength ratings shift over the years — confirm the current parent and the current A.M. Best rating with the carrier as of 2026. Your rights as owner are unaffected either way. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Delaware Life or Sun Life.
Why Your VUL Surrender Value Keeps Moving
Inside a VUL, premium that is not consumed by charges goes into subaccounts you selected — equity funds, bond funds, money market options. Those balances float with the market. Two things follow. First, any surrender quote is a snapshot with a short shelf life. Second, a market downturn can shrink the account value that is silently paying your policy’s internal costs.
That is why VUL owners are sometimes blindsided by a premium call. The policy did not change; the account that was covering the charges got smaller. Understanding how cash surrender value works is the first step in judging any exit.
M&E Charges and the Cost-of-Insurance Drag
A VUL carries several layers of internal cost. Mortality and expense risk charges (M&E) are deducted against the separate account for the insurance risk and expense guarantees the carrier takes on. On top of that sit fund-level management fees, administrative charges, and the cost of insurance itself.
Cost of insurance is the one that bites. It is charged per thousand dollars of net amount at risk and it rises with the insured’s age — modestly in your fifties, steeply in your seventies and eighties. In an underfunded VUL, rising cost of insurance eats subaccount value faster than the market replaces it, and the policy starts demanding larger premiums just to stay alive. That squeeze is the single most common reason a senior VUL owner starts looking for an exit.
What a Buyer Is Actually Valuing
It surprises most sellers: a life settlement buyer is not buying your subaccounts. On closing, the buyer typically becomes the owner and can reallocate or reposition the investment mix as it sees fit. What the buyer is paying for is the death benefit, the insured’s estimated life expectancy, and the premium load required to carry the policy to maturity.
So a strong subaccount balance is not automatically a strong offer. It raises the surrender value you would forgo, which is the number an offer must beat. Meanwhile a depleted VUL with a large death benefit and a qualifying insured can price surprisingly well, because the buyer is buying the contract’s economics, not its balance.
| VUL Feature | How It Behaves | Effect on a Settlement Offer |
|---|---|---|
| Separate-account subaccounts | Value moves with the markets | Sets the surrender value an offer must beat; not what the buyer is buying |
| M&E and fund fees | Deducted continuously | Drag on account value; raises the premium needed to carry the policy |
| Cost of insurance | Rises with the insured’s age | Larger future premium load, which buyers subtract from value |
| Death benefit | Fixed or increasing per election | The primary driver of what a buyer will pay |
| Policy loan | Accrues interest, reduces net proceeds | Usually paid off at closing out of the sale proceeds |
Settlement Versus the Other Exits
Before selling, put every option on the table. You can surrender for the current cash value, subject to any remaining surrender charges. You can reduce the face amount to lower ongoing charges. You can consider a 1035 exchange into a different contract, though that keeps you in the insurance system rather than turning the policy into cash. Or you can sell.
Research on the secondary market (GAO-10-775) found sellers typically received about 10% to 35% of face value and roughly 4 to 8 times cash surrender value. Those are market-wide ranges, not a promise, and a VUL with a healthy account balance will show a smaller multiple simply because the denominator is bigger. Weigh it with is a life settlement worth it.
Documents to Gather Before You Ask for a Number
- Policy cover page. Insurer, policy number, face amount, issue date. This alone is enough to start a free review.
- Most recent annual statement. Look for the face amount, account value, surrender value, surrender charge if any, loans, and the subaccount allocation.
- An in-force illustration from Delaware Life. For a VUL, ask for it at more than one assumed rate of return — including a conservative or guaranteed assumption — so you can see how long the policy lasts if the market does not cooperate. Our page on in-force illustrations explains what to request.
- The prospectus or fund fact sheets, if you want to see the fund-level fees layered under the M&E charge.
Timing, Escrow, and Closing
Most settlements run about 60 to 120 days. The pattern: free review in days; documentation and life-expectancy underwriting over two to four weeks; offers and contracts; then the carrier’s change-of-ownership processing.
Two non-negotiables. Get every offer in writing, and if a broker is involved, ask for both the gross offer and the net-to-you amount after commissions. And insist your funds be held by an independent escrow agent, released only when Delaware Life confirms the ownership transfer. Ask about your state’s rescission window as well.
Who Qualifies
The general screen is an insured in their senior years, a death benefit of $100,000 or more, a policy past contestability, and a health picture that shortens the buyer’s expected holding period. VUL policies that are struggling — where required premiums have climbed and the account value is thinning — are common settlement candidates precisely because the owner no longer wants to feed them.
A word on taxes: proceeds from a life settlement have their own reporting rules and the treatment depends on your basis and the policy’s cash value. Talk to your own CPA or tax attorney before closing. Nothing here is tax advice.
Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Delaware Life Insurance Company or Sun Life Financial. We work with policies of $100,000 or more in death benefit. For a free, no-obligation policy 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 a VUL policy even though its value goes up and down?
Yes. Market movement affects your surrender value, not your right to sell. Buyers price the contract on the death benefit, the insured’s life expectancy, and the premiums needed to keep it in force, so a fluctuating subaccount balance does not disqualify the policy.
Does Delaware Life have to agree to the sale?
No. The carrier is not a party to the decision and its permission is not needed. After closing, Delaware Life simply records the new owner and beneficiary, which is a routine administrative step.
My VUL keeps asking for higher premiums. Why?
In a variable universal life policy, internal charges — especially the cost of insurance, which rises with age — are deducted from the account value. If market returns and premiums do not keep up, the account thins out and the carrier requests more premium to prevent a lapse. Request an in-force illustration to see how long the policy lasts at your current payment.
Will the buyer keep my fund allocations?
Generally no. Once ownership transfers, the buyer controls the contract and can reallocate the subaccounts. That has no effect on the price you were paid, which is fixed at closing.
Is a 1035 exchange better than selling?
It depends on your goal. A 1035 exchange moves value into another insurance or annuity contract without an immediate taxable event, but it does not put cash in your hand. A settlement converts the policy to a lump sum and ends the coverage. Compare both with a professional who knows your full picture.
How much can I expect to receive?
Federal research (GAO-10-775) found sellers typically received about 10% to 35% of face value, or roughly 4 to 8 times cash surrender value. For a VUL with a large account balance the multiple runs lower, because surrender value is already high. Only a review of your actual contract produces a realistic figure.
What is the tax treatment of the proceeds?
It depends on your cost basis, the policy’s cash value, and current law, and there are specific reporting requirements. This is a question for your own CPA or tax attorney before you sign anything — we do not give tax advice.
How do I start?
Send the policy cover page for a free, no-obligation review, or call (305) 209-7183. If the policy looks like a candidate, the next step is an in-force illustration from Delaware Life.
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
- What Is An In Force Illustration
- Is A Life Settlement Worth It
- How Much Can I Get For My Life Insurance Policy
- Sell My Delaware Life Guaranteed Universal Policy
- How It Works Policy Options
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.