Yes — a variable universal life policy can be sold in a life settlement if you and the policy qualify. The contract belongs to you, and a buyer purchases it from you and becomes the new owner and beneficiary. The insurance company’s permission is not required, and the carrier is not a party to your decision; it records the ownership change after closing.
VUL is the policy type that behaves least like insurance and most like an investment account wrapped in a death benefit. Your premiums, after charges, go into separate-account subaccounts that function like mutual funds. The value rises and falls with the market, which means the surrender value quoted to you this month is not the surrender value next month — and that alone changes how you should approach the decision.
EMC National Life was the Des Moines, Iowa life operation connected to Employers Mutual Casualty Company, a property-casualty insurer founded in Des Moines in 1911. That life block was sold and renamed, so in 2026 you may receive statements under an unfamiliar company name; confirm the current servicing entity before requesting documents. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of EMC National Life or its successor.
In This Article
- Your Cash Value Is a Moving Target
- The Charges Working Against the Account
- Buyers Value the Death Benefit, Not the Subaccounts
- Read Your Prospectus and Statement Together
- Loans and Withdrawals Behave Differently Here
- Process and Realistic Timing
- Who Qualifies for a VUL Settlement
- Alternatives Worth Pricing First
- Frequently Asked Questions
Your Cash Value Is a Moving Target
With whole life, the cash value is on a guaranteed schedule. With VUL, it is whatever the subaccounts are worth at the close of business. A 15% market drawdown can take a meaningful bite out of your surrender value in a matter of weeks, and a strong quarter can push it back up.
Two practical implications. First, if you are comparing a settlement offer to surrendering, use a current value dated close to your decision, not a figure from an annual statement printed months ago. Second, do not treat the surrender number as a stable floor. It is not.
This is also why VUL owners sometimes discover their policy is in worse shape than they thought: a market decline plus rising insurance charges can drain an account faster than either would alone. Our overview of cash surrender value covers how surrender charges in early years compound that effect.
The Charges Working Against the Account
A VUL policy carries several layers of cost, and most owners have never seen them itemized:
- Mortality and expense risk (M&E) charges, deducted from separate-account assets for the insurance risk and administration.
- Cost of insurance (COI), a monthly deduction that rises with the insured’s age — steeply after 70.
- Fund-level expenses inside each subaccount, on top of the policy charges.
- Policy and administrative fees, often a flat monthly amount.
- Surrender charges, in the early durations.
Ask the servicing company for a written breakdown of the current annual charges as of 2026. When subaccount returns do not exceed total charges, the account value shrinks even in a flat market — and in an underfunded VUL held into the insured’s 80s, the COI drag can consume the account entirely.
Buyers Value the Death Benefit, Not the Subaccounts
This is the point most VUL owners get backwards. A settlement buyer is not purchasing your investment account. It is purchasing a contractual promise to pay a death benefit, and it is calculating how much premium it must feed the policy to keep that promise alive.
So the drivers of your offer are the face amount, the estimated life expectancy of the insured, and the premium required to hold the policy in force — not how well your subaccounts performed. A policy with a battered account value and a large death benefit can be an attractive purchase. A well-funded policy with a modest face amount may draw nothing.
Federal research on the market (GAO-10-775) found sellers typically received roughly 10% to 35% of the death benefit, several times what surrendering paid on average. That is a market range, not a quote; see how much you can get for a policy for the variables that move it.
Read Your Prospectus and Statement Together
VUL is a securities product as well as an insurance product, which is why it came with a prospectus. That document, plus your quarterly or annual statement, tells you what you actually own.
On the statement, find: total account value, net surrender value after any surrender charge, allocation across subaccounts, monthly deduction amounts, any loan balance, and the current death benefit option (level versus increasing). An increasing death benefit option raises the death benefit as account value grows, and switching options changes both the coverage and the charges — do not change anything mid-process without understanding the effect.
Then request an in-force illustration. For VUL, ask for projections at multiple assumed rates of return, including 0%, so you can see the lapse year under a flat market. See what an in-force illustration is.
| What You See | What Drives It | Does a Buyer Price On It? |
|---|---|---|
| Subaccount balance | Market performance and fund expenses | Only indirectly, through lapse risk |
| Net surrender value | Account value minus surrender charge and loans | As a comparison point for you |
| Face amount | Contract terms and death benefit option | Yes — the primary driver |
| Required premium to age 100 | COI, M&E, fees, assumed returns | Yes — the cost of carrying the policy |
| Insured’s health | Medical records and life expectancy estimates | Yes — the other primary driver |
Loans and Withdrawals Behave Differently Here
Borrowing from a VUL policy moves money out of the subaccounts, so the borrowed portion stops participating in the market while loan interest accrues against the policy. A loan taken during a downturn and left outstanding through a recovery is one of the quiet ways VUL policies get into trouble.
For a settlement, the mechanics are simple: any outstanding loan plus accrued interest is settled through the transaction, so your net proceeds equal the offer minus the payoff. Get a payoff figure projected to your expected closing date rather than using the last statement.
Process and Realistic Timing
Start with the policy cover page — insurer, policy number, face amount, issue date. That is enough for a free, no-obligation review.
From there: the current statement, the in-force illustration at several return assumptions, and a HIPAA authorization so life expectancy can be estimated from medical records. Offers should be in writing, with both gross and net-of-commission figures if a broker is involved. Contracts close through an independent escrow agent, the carrier records the new owner and beneficiary, escrow releases your funds, and most states then provide a rescission window. Budget 60 to 120 days end to end. Compare the alternatives on settlement vs. surrender and how the policy options work.
Who Qualifies for a VUL Settlement
The usual profile: insured roughly 65 or older, or younger with significant health impairments; death benefit of $100,000 or more; policy past its contestability period; premium requirement that makes carrying the policy sensible for a buyer.
VUL policies bought in the 1990s and early 2000s as retirement supplements are a common source of candidates, because the accumulation story that justified them rarely survived two market cycles plus decades of rising insurance charges. Full criteria are on our page covering what policies qualify.
Alternatives Worth Pricing First
Before selling, ask the carrier about three things: reducing the face amount so the required premium falls to a level the account can sustain; switching from an increasing to a level death benefit option; and whether a 1035 exchange into a simpler guaranteed product makes sense for your situation. Each can solve a premium problem without a sale.
Also check for an accelerated death benefit rider if there is a qualifying illness. Because VUL is a securities product, tax treatment of a surrender, an exchange, or a sale can differ meaningfully — this page is education, not legal, tax, or investment advice, and you should involve your own tax professional and the registered representative who services the contract. More background sits in our education center. For a free review, send the policy cover page or call (305) 209-7183.
Frequently Asked Questions
Can I sell a VUL policy whose account value has dropped?
Yes, and a depressed account value does not necessarily reduce your offer. Buyers price the death benefit and the premium needed to keep the policy in force, not the subaccount balance. A large face amount with a manageable premium can be attractive even when the account is nearly empty.
Does the insurance company have to approve the sale?
No. The policy is your property and a buyer purchases the contract from you. The carrier simply records the change of owner and beneficiary once the transaction closes. Pine Lake is not affiliated with, endorsed by, or acting on behalf of the carrier.
What are M&E charges and why do they matter?
Mortality and expense risk charges are deducted from separate-account assets to cover insurance risk and administration. Together with cost of insurance, fund expenses, and policy fees, they can exceed subaccount returns, which causes the account value to shrink over time. Ask the carrier for a written breakdown of current annual charges.
Should I move my subaccounts to cash before selling?
Do not make allocation changes as a settlement tactic without talking to the registered representative who services the contract and your own tax professional. Buyers price the death benefit rather than the allocation, so changes rarely help and can have consequences you did not intend.
What should the in-force illustration show for a VUL policy?
Ask for projections at several assumed rates of return, including 0%, so you can see the year the policy would lapse in a flat market. Also request the premium required to carry the policy to a target age, current charges, any loan balance, and the current death benefit option.
How does an outstanding loan affect my payout?
The loan and accrued interest are settled through the transaction, so your net proceeds are the offer minus the payoff. Request a payoff figure projected to your expected closing date, since interest continues to accrue while the file is in process.
How much might I receive for a VUL policy?
Federal research on the market (GAO-10-775) found sellers typically received roughly 10% to 35% of the death benefit, on average several times cash surrender value. Your outcome depends on age, health, face amount, and required premium. Only a review of the actual policy gives a real number.
How long does it take?
Plan on 60 to 120 days from application to funded payment, with medical record retrieval usually the slowest step. Funds should be held by an independent escrow agent until the insurer confirms the ownership transfer, and most states provide a rescission window afterward.
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Related Reading
- Cash Surrender Value Life Insurance
- What Is An In Force Illustration
- How Much Can I Get For My Life Insurance Policy
- Life Settlement Vs Surrender
- How It Works Policy Options
- What Policies Qualify For Life Settlement
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.