Yes — a Farm Bureau universal life policy can be sold in a life settlement, and universal life is the type that shows up most often in the secondary market. The policy is your property, the buyer purchases the contract, and the insurer’s approval is not part of the equation. Its only role is recording the new owner and beneficiary at closing.
Two things bring people to this page. The first is a letter saying the premium must increase sharply or the policy will lapse. The second is confusion about which company actually issued the coverage, because several separate insurers use the Farm Bureau name — Farm Bureau Life Insurance Company in West Des Moines, Iowa is not the same entity as Southern Farm Bureau Life Insurance Company in Jackson, Mississippi, or the state-affiliated life companies in Tennessee, Kentucky, or Alabama. Your cover page names the issuer.
Below: why universal life policies fail, the exact illustrations to request, what buyers actually pay for, and the situations where keeping or surrendering beats selling. Pine Lake Life Solutions is independent and not affiliated with any Farm Bureau organization.
In This Article
- Identify the Issuing Company First
- Why Universal Life Policies Stop Working
- Exactly What to Request From the Carrier
- What Buyers Pay For
- When Keeping or Surrendering Is the Right Answer
- How the Sale Closes
- Taxes and Warning Signs
- Other Farm Bureau Policy Types and Next Steps
- Frequently Asked Questions
Identify the Issuing Company First
Farm Bureau insurance operates through a federation of state and regional organizations, each with its own affiliated companies. That matters for a settlement in three practical ways: only the issuing company can produce your in-force illustration, only its change-of-ownership forms will be accepted, and only its financial strength rating is relevant to your contract.
Read the issuer’s name on the cover page and on your annual statement, then call the number on your most recent premium notice. Confirm as of 2026 who services the policy today, since blocks of in-force business across the industry are sometimes reinsured or administratively transferred without a mailing anyone remembers. Verify the current A.M. Best rating at ambest.com rather than trusting a number from an old brochure. If your policy came from the Iowa company, one additional fact is worth knowing: its parent FBL Financial Group traded publicly on the NYSE as FFG until 2021, when Farm Bureau Property & Casualty Insurance Company bought the outstanding public shares and took it private. That was a shareholder event, not a policyholder one — no stock or cash was distributed to policyholders and no policy guarantee changed.
Why Universal Life Policies Stop Working
A universal life policy has an account value that earns interest and monthly deductions that come out of it. The largest deduction is the cost of insurance, and it is based on the insured’s attained age. It is inexpensive at 55 and dramatically more expensive at 82.
Policies issued in the 1980s and 1990s were commonly illustrated at crediting rates far higher than the decades that followed actually delivered. The account value grew more slowly than projected while the age-based charges climbed exactly on schedule. Eventually the account cannot carry the deductions, and the carrier sends a notice that the planned premium is no longer enough.
At that point the owner has four honest choices: pay the higher premium, reduce the death benefit so the charges fall, surrender for the remaining cash value, or sell the policy. A settlement often produces the most money because the policy is worth more to a buyer who can fund it than to an owner who cannot — but that is not universally true, and the next sections say when it is not.
Exactly What to Request From the Carrier
For universal life, the in-force illustration decides nearly everything. Ask the issuing company for it in these versions:
- Current charges and current credited rate — how long the policy lasts under today’s conditions and what premium sustains it.
- Guaranteed charges and guaranteed minimum rate — the worst-case column. If this shows lapse in five years, that is the downside a buyer prices.
- Premium solve to age 100 or 121 — the minimum annual premium to carry the policy to maturity. This is the buyer’s carrying cost and it drives the offer more than almost anything else.
- A current values page — account value, surrender value, outstanding loan and interest rate, and the current death benefit option (level or increasing).
Read the projected lapse year first. A policy shown lapsing at 85 on an insured who is 80 has a short window of real market value; waiting shrinks it.
What Buyers Pay For
Pricing comes down to expected holding period, the cost of holding, and the size of the payoff. Strong candidates generally show: an insured age 65 or older, or younger with meaningful health changes since issue; a death benefit of $100,000 or more; a policy past the two-year contestability period; and a minimum sustaining premium that is modest relative to the face amount.
What weakens an offer: a very large required premium, an outstanding loan (the balance reduces proceeds dollar for dollar — see how policy loans work), a face amount too small to justify transaction costs, or an increasing death benefit option whose cost is escalating.
Across the market, the GAO study (GAO-10-775) found sellers historically received roughly 10% to 35% of face value. That is a market-wide range across many policy types and years, not a projection for any single contract. The full screen is in what policies qualify.
| What the Illustration Shows | What It Means | Best Move |
|---|---|---|
| Sustains past age 100 at an affordable premium | Policy is healthy | Keep it if the coverage is still needed |
| Premium must rise sharply; coverage no longer needed | Textbook settlement candidate | Request a free policy review |
| Projected lapse within a few years, health has declined | Value is real but eroding | Move quickly, before the grace period |
| Surrender value large relative to death benefit | Little spread for a buyer | Compare surrender directly; it may win |
| Large outstanding policy loan | Proceeds reduced dollar for dollar | Get a written payoff figure first |
| Face amount under $100,000 | Below most buyers’ minimum | Consider reducing coverage or surrendering |
When Keeping or Surrendering Is the Right Answer
Keep the policy when a surviving spouse or a dependent adult child genuinely needs the death benefit and the higher premium is payable. Cash today does not replace protection a household is counting on.
Reduce the face amount when you need some coverage but not all of it. Cutting the death benefit cuts the cost-of-insurance charges proportionally, and that alone can make a failing policy sustainable.
Surrender when the remaining cash value is substantial relative to the death benefit and no buyer is interested, or when you need money in three weeks rather than three months. Surrender is fast and certain; a settlement takes 60 to 120 days. This is the honest comparison laid out in life settlement versus surrender, with the mechanics in cash surrender value.
Look at an accelerated death benefit rider when the insured is terminally ill and the contract includes one. It usually pays out faster and with far less paperwork, though often for less than a viatical settlement would produce. Ask the carrier whether the rider exists before starting anything else.
How the Sale Closes
Start with a free review — send only the cover page. If the policy looks like a candidate, the documentation phase gathers the illustrations above plus a HIPAA authorization so life expectancy can be estimated. Keep that authorization specific and revocable, and know who receives the records.
Offers should always arrive in writing with the gross amount and your net after all fees shown separately. Closing runs through an absolute assignment: a change of owner and change of beneficiary recorded by the issuing company. Request its forms and its requirements for notarization, trust-owned policies, and irrevocable beneficiaries in advance, since rejected paperwork is the most common cause of delay.
Funds go into independent escrow before ownership transfers and are released only after the carrier confirms the recorded change. Most states then provide a rescission period in which the sale can be unwound.
Taxes and Warning Signs
In general terms, settlement proceeds are taxed in tiers: amounts up to your cost basis as a return of premium, the portion above basis up to cash value as ordinary income, and the remainder as capital gain. A certified terminal or chronic illness can change the treatment substantially. That is a description of the framework rather than advice; ask a CPA or tax attorney to apply it to your policy before you close.
End the conversation with anyone who offers a number verbally and refuses to put it in writing, skips escrow, sets a same-day signing deadline, asks for an open-ended medical release, or will not disclose compensation. If a life settlement broker is involved, ask how many buyers bid and what each bid was.
Other Farm Bureau Policy Types and Next Steps
Different contract, different analysis. Whole life carries a guaranteed surrender floor and possible dividends; term generally must be converted before it can be sold; guaranteed universal life is priced almost entirely off its no-lapse guarantee. See our guides to selling a Farm Bureau Life whole life policy, a Farm Bureau Life term policy, or a Farm Bureau Life GUL policy.
If you have received a premium increase notice, do not wait for the grace period to run. Send the policy cover page for a free review or call (305) 209-7183. Pine Lake Life Solutions is not affiliated with Farm Bureau Life Insurance Company, Southern Farm Bureau Life, or any state Farm Bureau organization, and provides education rather than legal, tax, or investment advice.
Frequently Asked Questions
Why did my Farm Bureau universal life premium go up?
Universal life deducts a monthly cost of insurance that rises with the insured’s age, and many older policies assumed higher interest crediting than the market delivered. When the account value can no longer absorb the rising charges, the carrier requests a larger premium to keep the coverage in force. An in-force illustration will show what is required and how long the policy lasts at each premium level.
Which Farm Bureau company do I contact?
The one printed on your policy cover page and annual statement. Farm Bureau Life Insurance Company in Iowa, Southern Farm Bureau Life in Mississippi, and several state affiliates are separate legal entities. Only the issuing company can produce your in-force illustration and process a change of ownership.
Does the insurer have to approve the sale?
No. You own the policy and can transfer it to a buyer. The carrier records the resulting change of owner and beneficiary. Request the current forms and notarization requirements early, since paperwork issues are the most frequent cause of delayed closings.
What documents matter most?
The in-force illustration on both current and guaranteed bases, plus a premium solve showing the minimum needed to carry the policy to age 100 or 121. Add a current values page with account value, surrender value, and any loan balance. Those documents drive the entire valuation.
How much might my policy be worth?
The GAO’s market study found sellers historically received about 10% to 35% of face value, but the spread within that range is very wide. Age, health, the required premium, and the death benefit all move the number. A free review of the actual documents is the only honest way to answer.
My policy is in the grace period. Is it too late?
Not necessarily, but urgency is real. A lapsed policy is worth nothing to anyone, and value falls as the lapse date nears. Ask the carrier immediately about the grace period end date and reinstatement requirements, and get the policy reviewed at the same time.
Can I keep part of the death benefit?
Sometimes. Certain transactions are structured so the buyer takes over premiums while you retain a portion of the death benefit for your beneficiaries. You receive less cash up front in exchange. Ask whether a retained death benefit structure is available when you review an offer.
Are the proceeds taxable?
Usually in part. The general framework treats amounts up to cost basis as a return of premium, the portion above basis up to cash value as ordinary income, and the rest as capital gain, with different rules for a certified terminal or chronic illness. Have a CPA apply those rules to your specific numbers before closing.
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Related Reading
- Life Settlement Vs Surrender
- Cash Surrender Value Life Insurance
- What Policies Qualify For Life Settlement
- Sell My Farm Bureau Life Whole Life Policy
- Sell My Farm Bureau Life Term Policy
- Sell My Farm Bureau Life 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.