Only if the conversion privilege is still exercisable, and with this particular block there is a specific way people lose it: they replace the policy. Everlake Life Insurance Company is the renamed Allstate Life Insurance Company, acquired by Blackstone in a deal that closed on November 1, 2021, and it writes no new individual life business. Meanwhile, Allstate’s agents remain in the field selling life products underwritten by other carriers. The agent whose name is on your file often cannot service the contract and does have a reason to suggest something new.
That combination is why this page leads with a warning rather than with mechanics. A settlement buyer is not purchasing term insurance; it is purchasing the contractual right to convert that term policy into permanent coverage at attained age with no new medical underwriting. Replace the policy and the conversion right is extinguished along with it. On an insured whose health has declined, that can be a six-figure mistake made in a fifteen-minute kitchen-table meeting.
In This Article
- Why the conversion right is the whole asset
- Your Allstate agent probably cannot help, and may have a conflict
- The replacement rules that exist to protect you
- Finding the deadline when the records are thin
- Sequencing a sale, and choosing the right conversion target
- If conversion has expired, and who actually has a case
- Frequently Asked Questions
Why the conversion right is the whole asset
Institutional buyers hold policies until the death benefit is paid. Term insurance ends on a fixed date, so a buyer that acquires pure term risks paying a purchase price plus years of premiums and collecting nothing. No discount rate makes that work.
Conversion changes the instrument. It is a contractual right to exchange the term contract for a permanent policy at the insured’s attained age, using the underwriting class from the original application, with no exam and no attending physician statement. Current health has no bearing on eligibility. That is exactly why a term policy on someone whose life expectancy has shortened materially since issue can be worth far more than the premiums remaining on it, while the identical policy on a healthy insured is worth very little.
Two operational rules follow. A serious diagnosis is a reason to locate the conversion deadline that week, not a reason to stop paying premiums, because a lapse ends the option permanently and reinstatement generally requires evidence of insurability the insured may no longer have. And if the privilege has already expired, no broker can produce an offer; the contract either contains the option or it does not. Our explainer on the term conversion rider sets out the mechanics of the exchange.
Your Allstate agent probably cannot help, and may have a conflict
When Allstate sold its life underwriting operations, the agency force did not go with it. Allstate agents continue to sell life insurance, now underwritten by other companies. An Everlake contract, by contrast, sits in a runoff block administered for efficiency rather than through the agent relationship.
The practical result is an orphaned policy. Nobody calls to tell you a conversion deadline is approaching. Nobody flags that the level period ends next year. And when you do call the agent whose name is in your file, the tool they have available is a new policy from a carrier they currently represent, not a conversion of a contract they no longer service.
We are not suggesting bad faith. We are describing a structural conflict, and the person on the other side of the table may not have thought it through either. But a recommendation to replace an in-force convertible term policy needs to be tested hard, because the replacement is irreversible and the conversion right does not survive it. Ask three questions: what is the conversion expiry on my existing policy, what permanent plans is it convertible into, and how does the proposed new policy compare on those terms. If the answers are vague, the recommendation is not ready.
Go directly to Everlake’s policy service center for the answers. Have the policy number, the insured’s full legal name, date of birth, and Social Security number ready, and ask for everything in writing.
The replacement rules that exist to protect you
Most states have adopted replacement regulations based on a National Association of Insurance Commissioners model, and they give you leverage worth using.
In broad terms, when a producer recommends replacing an existing life policy, the transaction triggers disclosure duties: a signed notice regarding replacement identifying the policy being replaced, delivery of that notice to the applicant, and notification of the existing insurer so it has an opportunity to respond. Many states also extend the free-look period on a replacement policy beyond the standard window, giving the buyer additional days to return the new contract for a full refund.
Use all of it. Insist the replacement notice be completed accurately rather than left blank. Read the existing insurer’s conservation response if one arrives rather than discarding it, because it will typically contain the in-force values you were trying to obtain anyway. And if the extended free look applies, treat it as real time to get a second opinion rather than as paperwork.
The same skepticism belongs on the settlement side of the table. A legitimate process discloses who is compensated and how, produces written offers you can compare, and does not pressure. Anyone asking for an upfront fee, refusing to name the licensed provider behind an offer, or telling you an offer expires in forty-eight hours is showing you something. Our page on life settlement red flags lists the specific patterns.
| Action being proposed | What happens to the conversion right | What to verify first |
|---|---|---|
| Replace with a new policy from another carrier | Destroyed when the old policy terminates | Existing conversion expiry and available plans, in writing |
| Convert with the existing carrier | Exercised; you now hold permanent coverage | Price of each conversion plan and how buyers value it |
| Sell the convertible term policy | Transfers to the buyer, who exercises it | At least four to six months of runway on the deadline |
| Let the policy lapse | Destroyed permanently | Whether reinstatement is available and on what terms |
| Do nothing until the level period ends | Usually already expired by then | The guaranteed renewal premium schedule |
Finding the deadline when the records are thin
Conversion privileges normally expire at the earlier of a stated attained age, commonly between 65 and 70, or a stated policy year, often 10 or 15 even on a 20- or 30-year level product. Owners consistently assume the right runs as long as the level premium does, and it usually does not.
Look in the policy body for a provision headed Conversion Privilege, Right to Convert, or Exchange Option, and check the schedule page for a separate conversion rider with its own expiry. Closed-block servicing complicates this. Records from the 1990s and 2000s may be imaged rather than indexed, and the representative on the phone may have no familiarity with a discontinued Allstate product. Expect to be patient and to escalate.
Ask for four items in writing: the last date conversion may be exercised, the complete list of permanent plans available for conversion on that specific contract, whether the full face amount is convertible or only a portion, and the guaranteed renewal premium schedule after the level period. A conversion right limited to part of the face amount is a materially smaller asset, and buyers price it accordingly.
If a written request stalls, the insurance department of the state where you live accepts consumer complaints about servicing delays, and that generally produces movement. If you cannot locate the policy at all, our guide to confirming whether a policy still exists covers the free state and NAIC locator services.
Sequencing a sale, and choosing the right conversion target
If the conversion window has at least six months of runway, selling the term policy as it stands is generally the cleaner route. The buyer takes ownership with the conversion right attached and exercises it after closing, so the seller never funds a permanent premium at an advanced age. A settlement typically runs 60 to 120 days from application to funded escrow, which is why a shorter window causes buyers to decline on timing rather than merit.
If the deadline forces a conversion first, the plan chosen matters enormously to price. A guaranteed universal life design with a long no-lapse guarantee gives the buyer a fixed, predictable carrying cost and prices best. A cash accumulation product with a heavy target premium, or a variable chassis exposed to market performance, prices worse because the buyer must underwrite the risk of funding it more heavily than planned. Our Everlake guaranteed universal life page covers how those contracts behave.
The mistake that costs the most is converting into whatever is suggested and asking about market value afterward. Get the conversion options quoted and get a preliminary read on how each would be valued before electing one. And never surrender or lapse anything while a review is pending, because once coverage ends there is nothing left to evaluate. The comparison is laid out at life settlement versus term conversion.
If conversion has expired, and who actually has a case
With the conversion privilege gone, the term policy has essentially no market value, and the remaining decisions are about coverage rather than cash. Read the guaranteed renewal rate table on the schedule page: most level term contracts continue as annually renewable term at guaranteed maximum rates recalculated at attained age, often several times the level premium in the first post-level year and climbing from there. For an uninsurable insured, a year or two of expensive coverage can still be a rational purchase. Ask whether the contract permits a face amount reduction, which cuts the premium while keeping coverage. And ask whether an accelerated death benefit rider is attached, since a qualifying terminal diagnosis makes that claim faster and simpler than anything the secondary market offers.
The profile that does produce settlement offers is narrow: the insured is generally 68 or older, the death benefit is comfortably above $100,000 because fixed underwriting and closing costs put the floor there, the conversion privilege has four to six months of runway, and health has declined enough since underwriting that an independent life expectancy underwriter would score the case materially shorter than standard mortality. Serious impairments qualify. Well-controlled chronic conditions generally do not.
To get a preliminary read, send the policy cover page, the carrier’s written statement of the conversion expiry and available conversion plans, and a short list of current diagnoses and treating physicians.
Pine Lake Life Solutions provides education and a free policy review. We do not purchase policies and we are not licensed in every state. Whether a settlement is permitted where you live, and who must be licensed to arrange one, is set by your own state’s insurance law rather than by Illinois law, even though Illinois supervises Everlake. Nothing here is legal, tax, or investment advice, and anything with estate or Medicaid consequences belongs with your own attorney first.
Frequently Asked Questions
My Allstate agent says I should replace this policy. Should I?
Not without testing it. Allstate agents now sell life products underwritten by other carriers and generally cannot service an Everlake contract, so a new policy is the tool they have. Ask for your existing policy’s conversion expiry, the permanent plans it converts into, and a direct comparison. Replacement is irreversible and it destroys the conversion right.
What protections apply when a producer recommends a replacement?
Most states have adopted replacement regulations based on an NAIC model requiring a signed replacement notice, delivery of that notice to you, and notification of the existing insurer so it can respond. Many states also extend the free-look period on the replacement policy. Insist the notice be completed accurately and read the existing insurer’s conservation response rather than discarding it.
Who services my old Allstate term policy now?
If the contract names Allstate Life Insurance Company without a state qualifier, Everlake Life Insurance Company services it following the sale to Blackstone that closed on November 1, 2021. Allstate Life Insurance Company of New York is different; it was sold to Wilton Re and renamed Wilton Reassurance Life Company of New York. Read the exact name on the face page.
How long does a term conversion privilege usually last?
It ends at the earlier of a stated attained age, commonly between 65 and 70, or a stated policy year, often 10 or 15 even on a longer level term product. That means it frequently expires with years of level premium remaining. Get the exact date in writing from the carrier rather than assuming it matches the level term length.
Can a buyer convert the policy instead of me?
Yes, and it is standard practice when enough time remains. The buyer acquires the term contract with the conversion right attached and exercises it after closing, so you never fund a permanent premium at an advanced age. Settlements typically run 60 to 120 days from application to funded escrow, so deadlines closer than that usually cause buyers to decline.
Does a policy in a runoff block still honor its conversion right?
Yes. A conversion privilege is a contractual obligation that transferred with the legal entity when the block was sold, and a change of corporate ownership does not alter it. What can change is administration, meaning response times and record accessibility. Put your request in writing, and escalate to your state insurance department if a legitimate request stalls.
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Related Reading
- Can I Sell A Term Life Insurance Policy
- What Is A Term Conversion Rider
- Life Settlement Vs Term Conversion
- Life Settlement Scams Red Flags
- What Is Guaranteed Universal Life
- Sell My Everlake Life Guaranteed Universal Policy
- How To Find Out If A Policy Still Exists
- Sell Term Life 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.