Yes – a Grange Life variable universal life policy can be sold in a life settlement, provided you and the policy qualify. The transaction is a transfer of your contract to a buyer. The insurance company’s permission is not required, and the carrier is not a party to your decision – it records the change of owner and beneficiary after closing and nothing more.
VUL is the policy type where owners are most likely to misjudge what they have. The cash value sits in separate-account subaccounts that behave like mutual funds, so the surrender value quoted this month is not the surrender value next month. Meanwhile mortality and expense charges, fund fees and a rising cost of insurance are drawn out of that same balance every month, whether the market cooperates or not.
Grange Life Insurance Company of Columbus, Ohio sold its life insurance business to Kansas City Life in 2020; as of 2026, confirm with the carrier which entity services your contract and administers the separate account. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Grange Life or its successor servicer. This page is education only and is not legal, tax or investment advice.
In This Article
- What Makes VUL Different From Ordinary Universal Life
- The Charges That Quietly Drain an Underfunded VUL
- Why the Surrender Quote Changes Every Month
- What Buyers Actually Value in a VUL
- Documents and the Right Illustration to Ask For
- Process, Timing, and What to Do With the Subaccounts Meanwhile
- Is Selling the Right Move for a VUL Owner?
- Frequently Asked Questions
What Makes VUL Different From Ordinary Universal Life
In a standard universal life policy, the insurer declares a crediting rate and bears the investment risk. In a VUL, you choose subaccounts – equity, bond, balanced, money market – and you bear the investment risk. Assets sit in a separate account, legally segregated from the insurer’s general account.
Because of that investment element, VUL is a registered security. It was sold with a prospectus, and the person who sold it needed a securities registration in addition to an insurance license. If you still have the prospectus, keep it with the policy file – it is where the fee schedule is spelled out most plainly.
The Charges That Quietly Drain an Underfunded VUL
Four layers of cost come out of a VUL every month or year:
- Mortality and expense risk (M&E) charges – an asset-based charge against the separate account.
- Cost of insurance – the pure mortality charge, which is age-banded and climbs sharply in the seventies and eighties.
- Administrative and per-thousand policy charges.
- Underlying fund expenses inside each subaccount.
When a VUL is well funded, investment returns can absorb those charges. When it is underfunded – because premiums were reduced during good market years, or a market downturn hit while costs kept rising – the charges eat principal. Each month the balance shrinks, the same charge takes a bigger bite of what is left, and the policy accelerates toward lapse. That is why a VUL owner can be surprised by a demand for a much larger premium after years of paying comfortably.
Why the Surrender Quote Changes Every Month
If you call and ask what your VUL is worth today, you get a snapshot of market value minus surrender charges. Ask again in six weeks and you may get a materially different number. Nothing is wrong; that is how a separate account works.
Two practical implications. First, do not anchor your decision to a single quote – get the value on the same date as the illustration you are working from. Second, if you are comparing a settlement offer against surrender, understand that one side of the comparison is fixed and the other is not. Our page on cash surrender value explains how surrender charges are calculated and how long they typically run.
| VUL Charge or Feature | Who Bears It | Why a Buyer Cares |
|---|---|---|
| Mortality and expense (M&E) charge | Owner, as an asset-based deduction | Raises the annual cost of keeping the policy alive |
| Age-banded cost of insurance | Owner, monthly | Rises steeply at older ages – the biggest driver of lapse |
| Underlying subaccount fund fees | Owner, inside each fund | Further drag on an already thin account value |
| Subaccount market performance | Owner, not the insurer | Makes the surrender value a moving target |
| Death benefit amount | Fixed by contract terms | This is what the buyer is actually purchasing |
| Surrender charge period | Owner, if surrendering early | Explains why surrendering often nets far less than expected |
What Buyers Actually Value in a VUL
This surprises people: buyers largely ignore the subaccount balance. They are pricing the death benefit, the premium load required to keep the contract in force to life expectancy, and the insured’s life expectancy itself.
The account value matters only as an input to how long the policy survives without new premium. A buyer who purchases a VUL will typically move the subaccounts to a conservative option after closing, because their goal is to keep the contract alive at the lowest reliable cost, not to seek returns. So a VUL with a battered subaccount balance but a large death benefit and a reasonable required premium can price well – and one with a healthy balance but punishing internal charges may not.
The federal GAO study of the market (GAO-10-775) found sellers typically received roughly 10% to 35% of face value, about four to eight times cash surrender value. Ranges, not quotes – see how much a policy can bring.
Documents and the Right Illustration to Ask For
Start with the policy cover page alone – that is enough for a free review. If the policy moves forward, gather:
- The most recent annual statement, with the current subaccount allocation and total account value.
- An in-force illustration at guaranteed charges and a conservative assumed rate of return, plus a second run at current charges. VUL illustrations are only as good as the assumed return, so ask for a low assumed rate – many people are stunned by how different the lapse date looks. See what an in-force illustration is.
- The surrender charge schedule and any remaining surrender period.
- Loan and withdrawal history, which reduce both the death benefit and the proceeds.
- A HIPAA authorization for life expectancy underwriting.
Process, Timing, and What to Do With the Subaccounts Meanwhile
The process runs about 60 to 120 days: initial free review, two to four weeks for the illustration and medical records, then underwriting, offers, contracts, escrow and the ownership change. Your funds should sit with an independent escrow agent until the carrier confirms the transfer, and most states give you a rescission window afterward.
While the review is pending, keep paying the premium and do not make large subaccount changes without talking to whoever advises you on investments. Reallocating can change the projected lapse date that an offer was based on. Pine Lake does not give investment advice – that is a conversation for your own registered representative or financial adviser.
Is Selling the Right Move for a VUL Owner?
Selling tends to make sense when the coverage is no longer needed, when required premiums have outgrown what the policy is worth to your family, or when the projected lapse date is close enough that the realistic alternative is losing everything. It tends not to make sense when the policy is well funded, the premium is comfortable and heirs still depend on the benefit.
A third path worth pricing: some transactions let you keep a portion of the death benefit while eliminating premiums entirely. Compare all of them in how the policy options work, and check the eligibility basics in what policies qualify. Pine Lake reviews policies with a death benefit of $100,000 or more. To begin, send the policy cover page or call (305) 209-7183.
Frequently Asked Questions
Can a variable universal life policy be sold even though it is a security?
Yes. The life settlement is a transfer of the insurance contract to a buyer, and being a registered product does not prevent that. Your right to sell does not depend on the insurance company’s approval; the carrier simply records the ownership change at closing.
Why does my VUL surrender value keep changing?
The cash value is invested in separate-account subaccounts that move with the markets, and charges are deducted from that balance every month. A quote you get in January can be meaningfully different in March. Always match the value quote to the date of the illustration you are using.
Do buyers pay more if my subaccounts have performed well?
Generally no. Buyers price the death benefit, the premium needed to carry the policy to life expectancy, and the insured’s life expectancy. Account value matters mainly as an input to how long the policy lasts without new premium.
What are M&E charges?
Mortality and expense risk charges are asset-based deductions taken from the separate account to compensate the insurer for insurance risks and expenses. They sit on top of the cost of insurance, administrative charges and the fund fees inside each subaccount.
Which in-force illustration should I request for a VUL?
Ask for one run at guaranteed charges with a conservative assumed rate of return, and a second at current charges. The low-return run shows the realistic lapse date, which is the number that matters most in a settlement review.
Grange Life sold its life business. Who do I contact?
Grange Life Insurance Company sold its life insurance business to Kansas City Life in 2020, so a different company administers these contracts today. As of 2026, call the number on your most recent statement to confirm the servicing entity and request documents.
Should I move my subaccounts while a sale is pending?
Talk to your own financial adviser first. Reallocating can change the projected lapse date an offer was based on. Pine Lake does not provide investment advice and does not recommend specific subaccounts.
How long does the sale take?
Usually 60 to 120 days from the first review to funded payment. Keep paying premiums throughout, and expect your proceeds to be held in independent escrow until the servicing company confirms the transfer of ownership.
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Related Reading
- Cash Surrender Value Life Insurance
- What Is An In Force Illustration
- How It Works Policy Options
- What Policies Qualify For Life Settlement
- Sell My Grange Life Universal Life Policy
- Sell My Grange Life Group 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.