Yes – a Fidelity & Guaranty Life indexed universal life policy can be sold in a life settlement, and you do not need F&G’s approval, because the buyer purchases the contract from you and the carrier simply records the new owner. IUL is permanent coverage, which is the first thing any buyer requires. From there the questions are ordinary ones: the insured’s age and health, the size of the death benefit, and how much premium the policy needs going forward.
Indexed universal life sits at the center of F&G’s individual life business – the company’s book has historically leaned toward annuities and indexed products rather than traditional term or participating whole life. Verify the current product mix with the company. For owners, that means a lot of F&G policies in the market today are IULs bought as accumulation vehicles with substantial death benefits attached.
Below: how caps and floors work in practice, why the illustration you were sold rarely matches reality, how surrender charges affect the comparison, and when selling is not the right call. Pine Lake Life Solutions is not affiliated with F&G.
In This Article
- F&G’s Ownership History and Your Contract
- How Indexed Crediting Actually Works
- Ask for a Current-Assumption Illustration, Not the Sales One
- Surrender Charges Change the Comparison
- What an F&G IUL Might Draw From the Market
- Loans, Documents, and Closing
- When Selling Is Not the Right Answer
- Frequently Asked Questions
F&G’s Ownership History and Your Contract
Fidelity & Guaranty Life operates today as F&G Annuities & Life from Des Moines, Iowa, with roots in a Fidelity and Guaranty life business historically linked to Baltimore. It is unrelated to Fidelity Investments – a distinction worth making before you call anyone. Verify the precise entity named on your policy with F&G’s service center.
Ownership moved from Old Mutual to HRG Group and then, in 2020, to Fidelity National Financial, the large title insurance group; a minority stake in F&G was later listed on the New York Stock Exchange with the parent keeping control. Verify the current structure and A.M. Best rating with the company. None of this affects your contract rights or your ability to sell the policy.
How Indexed Crediting Actually Works
An IUL credits interest based on the movement of a market index, but your money is not in the index. Upside is limited by a cap or a participation rate; downside is limited by a floor, commonly zero percent. A strong index year produces the capped credit, not the index return. A negative index year produces the floor – but the policy’s charges are still deducted, so the account value can fall in a year when the credit was zero.
Carriers generally retain the right to adjust caps and participation rates on in-force policies within contractual limits. Many owners bought IUL when caps were higher and have watched them come down since. That, more than anything, explains why the account value on today’s statement sits below the line on the illustration you were shown at purchase.
Ask for a Current-Assumption Illustration, Not the Sales One
Request an in-force illustration from F&G at current charges and current caps, showing the premium required to keep the policy in force to ages 90, 95, and 100. Then ask for a second version assuming zero percent index credit every single year. That zero percent run is the stress test that tells you the truth about how much funding the policy really needs.
Buyers ask for the same two documents. A large death benefit with modest projected premiums prices well; a large death benefit that needs escalating rescue premiums does not. Nobody – not you, not a buyer, not your advisor – can evaluate an IUL without these illustrations in hand.
| Number to Request From F&G | What It Tells You | Why a Buyer Wants It |
|---|---|---|
| Current account value | What the policy has accumulated | Starting point for the funding analysis |
| Net cash surrender value | What surrender would actually pay after charges and loans | The baseline any offer must beat |
| In-force illustration at current caps | Premium needed to reach ages 90, 95, 100 | Drives the buyer’s cost projection |
| Illustration at 0% index credit | Worst-case funding requirement | The honest stress test of lapse risk |
| Loan payoff amount | What comes off the top at closing | Determines your net proceeds |
| Current caps and participation rates | How much upside is available going forward | Explains why the account value trails the sales illustration |
Surrender Charges Change the Comparison
IUL policies typically carry a surrender charge schedule that runs for a stretch of early policy years, and it can be substantial. The account value on your statement and the amount F&G would actually pay you if you surrendered are two different numbers. Ask for both, in writing.
This matters because the surrender check is the baseline a settlement offer has to beat. A policy in year six with a heavy surrender charge may pay far less on surrender than its account value suggests, which makes the settlement comparison look better. A policy past its surrender charge period pays closer to full account value, raising the bar an offer must clear. Same policy, different answer, depending only on the calendar.
What an F&G IUL Might Draw From the Market
A buyer estimates the expected premium-paying period from a life expectancy assessment and the premium amount from the in-force illustration. Hypothetically: a $500,000 IUL on an 80-year-old with meaningful health decline, $21,000 of net cash surrender value after surrender charges, and projected funding near $13,000 a year might see an offer around $95,000 – roughly 19% of face and about 4.5 times the surrender value.
Market-wide, life settlement proceeds have generally fallen between about 10% and 35% of the death benefit, and the GAO’s study (GAO-10-775) found sellers received roughly four to eight times cash surrender value. Those are ranges, not predictions. Plenty of policies attract no offer at all, usually because the insured is healthy, the face amount is small, or the funding requirement is too heavy.
Loans, Documents, and Closing
IUL policies frequently carry loans, since the product was often sold with the promise of tax-advantaged access to accumulated value. A loan does not stop a sale, but it is typically paid off from the proceeds at closing and directly reduces your net check. Get a payoff quote including accrued interest first.
Also gather the cover page, the latest annual statement showing account value, surrender value, and index crediting history, and the two in-force illustrations described above. Closing is completed through a change of ownership – often an absolute assignment – and a beneficiary change on F&G’s forms. Ask about notarization and recording times; plan on roughly 60 to 120 days overall, and confirm the rescission period in your state, which lets a seller unwind the sale within a defined window after funding.
When Selling Is Not the Right Answer
Say it clearly: an IUL is sometimes worth keeping. If the policy is well funded, the charges are manageable, and someone still depends on the death benefit, the strongest financial move is to leave it alone. If the insured is terminally ill, check the contract for an accelerated death benefit rider – it can pay a portion of the benefit early, faster and with far less process than any sale. And if the cash surrender value is modest during a Medicaid spend-down, often under roughly $15,000, surrendering may simply be cleaner.
Where a settlement does make sense, protect yourself. Do not accept a firm offer quoted before medical records and illustrations exist. Do not pay an upfront fee for a policy review. Do not let anyone rush you or steer you away from your family and advisors. Bring in a CPA on tax treatment and an elder law attorney anywhere benefits eligibility is involved – this page is education, not legal, tax, or investment advice.
Frequently Asked Questions
Can an F&G indexed universal life policy be sold?
Yes. IUL is permanent coverage, which is what secondary-market buyers require. Whether yours draws an offer depends on the insured’s age and health, the death benefit, and how much premium is projected to keep the policy in force.
Why is my IUL account value lower than the illustration promised?
Sales illustrations assume a level of index crediting that may not have happened, and carriers can adjust caps and participation rates on in-force policies within contract limits. Policy charges also continue in flat years. Request a current-assumption in-force illustration from F&G to see where you stand.
What does the surrender charge do to my decision?
It lowers what surrendering would actually pay, which is the baseline a settlement offer must beat. During the surrender charge years a settlement can look comparatively more attractive; after the charges expire, the surrender check is higher and the bar rises. Ask F&G for both the account value and the net surrender value.
Do I need F&G’s permission to sell?
No. The buyer purchases the contract from you, and the carrier’s job is to record the change of ownership and beneficiary on its own forms. Carriers do not approve or block settlements.
Is F&G the same as Fidelity Investments?
No. They are separate, unrelated companies. F&G is a life insurance and annuity company headquartered in Des Moines, Iowa, owned since 2020 by Fidelity National Financial. Verify the current corporate details with the company directly.
What if I have a loan on my IUL?
A loan usually does not prevent a sale. It is typically paid off from the proceeds at closing, which reduces your net amount. Request a payoff figure with accrued interest from F&G before comparing offers.
How much can I expect to receive?
Market-wide, settlement proceeds have generally landed between roughly 10% and 35% of the death benefit, and the GAO found sellers received about four to eight times cash surrender value. Results vary widely, and a healthy insured or a small policy may receive no offer at all.
Is Pine Lake connected to F&G?
No. Pine Lake Life Solutions is independent and has no affiliation with F&G Annuities & Life. We review policies with $100,000 or more of death benefit at no cost – send the policy cover page or call (305) 209-7183.
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Related Reading
- What Policies Qualify For Life Settlement
- Cash Surrender Value Life Insurance
- What Is Cash Surrender Value
- How It Works Policy Options
- Education Center
- Sell My Fidelity Guaranty Universal 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.