Yes – a term life policy from any carrier can lead to a life settlement when the policyholder and the policy qualify, but term nearly always has to be converted to permanent coverage first. A buyer purchases the contract from you. The insurance company’s permission is not required and the carrier is not a party to the decision – what the carrier does control is the conversion privilege, and that privilege has a deadline.
One thing to settle before you start: Homesteaders Life Company, the mutual insurer in West Des Moines, Iowa, writes almost exclusively pre-need funeral insurance distributed through funeral homes. That is small-face whole life used to fund an arrangement, not level term. If your file has a term policy in it, there is a real chance it came from a different company entirely. As of 2026, call and confirm the issuing company, the product, and whether a conversion right exists.
Two paths follow from that phone call, and this page covers both. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Homesteaders Life Company or any funeral home. Education only – not legal, tax or investment advice.
In This Article
First, Confirm What Kind of Policy You Have
Term life pays a death benefit if the insured dies during a set period, has no cash value, and ends when the term does. A pre-need funeral policy is permanent whole life sized to pay for a funeral, usually with a funeral home named as beneficiary or assignee.
Three quick checks on the cover page: Does it state a level premium period, such as 10, 15, 20 or 30 years? Is there a stated expiry or a schedule of annually increasing premiums after a level period? Is any funeral home named anywhere? If the answer to the last question is yes, you are looking at pre-need coverage, and the rest of this page about conversion does not apply to it.
Why Term Alone Rarely Sells
Buyers pay for a death benefit they expect will actually be paid, and they take on the premiums until it is. Term coverage expires – often exactly when the insured is most likely to need it – so a term contract with a few years left is a poor asset to purchase.
Convert that same coverage to a permanent policy and the picture changes completely. Now the death benefit lasts for life, and the contract can be underwritten and priced like any other permanent policy. That is why the conversion privilege, not the term policy itself, is the thing worth protecting.
How the Conversion Privilege Works
Most level-term contracts contain a right to exchange the term coverage for a permanent policy from the same company with no new medical exam and no health questions. Your original underwriting class carries over, which is enormously valuable if health has declined.
The right is bounded two ways, and your contract states which controls:
- Attained age limit – convert before the insured reaches a stated age.
- Policy year limit – convert within a set number of years from issue, frequently well before the level premium period ends.
Whichever hits first ends the right. Insurers may also limit which permanent products are available for conversion, and that product menu changes over time. Ask for the current list in writing along with a premium quote.
| Question | Where to Get the Answer | Why It Decides the Outcome |
|---|---|---|
| Is this term or pre-need coverage? | Policy cover page; carrier service line | Pre-need funeral policies are not settlement candidates |
| Is the conversion right still open? | Contract conversion clause; carrier in writing | Expired conversion usually ends the discussion |
| What is the last day to convert? | Carrier, in writing | Deadlines pass with no notice |
| What permanent products are available? | Carrier product list | Determines the converted premium |
| Is the death benefit $100,000 or more? | Cover page | Below that, buyers generally will not engage |
| Has health changed since issue? | Your physicians | Shorter life expectancy usually raises the offer |
Deadlines That Nobody Announces
Conversion deadlines expire quietly. No letter arrives. Premium notices keep coming, coverage keeps working, and the most valuable feature in the contract disappears on a date printed once, years ago, in a paragraph most people never read.
If the insured is in their late sixties or older, or the policy is more than ten years old, call this week. Ask the policyholder service line for the exact last day to convert and get it in writing. If the deadline has already passed and the insured is in ordinary health, the practical answer is that the policy is not sellable, and it is better to know that in one phone call than after two months of paperwork.
The Health Exception
There is one situation where an unconverted term policy can attract interest: a serious health impairment combined with enough remaining level term to make payment of the benefit likely inside that period. These cases exist but are uncommon, and they are priced case by case.
Even so, conversion generally produces a better result, because it eliminates the risk that the insured outlives the term. If health has changed materially since the policy was issued, mention it at the start of a free review – it is the single fact most likely to change the outcome. Background on eligibility is in what policies qualify.
Sequence: Review First, Convert Second
Converting is a financial commitment. The permanent premium at attained age is usually far higher than the term premium you have been paying, and it is the same money whether or not the converted policy attracts a buyer.
So run it in this order: confirm the deadline, request the conversion quote and the product list, send the term policy cover page and the quote for a free review, then file conversion paperwork once you know the converted policy is a realistic candidate. Pine Lake reviews policies with a death benefit of $100,000 or more, and there is no charge or obligation for the review. Weigh the outcome using is a life settlement worth it.
After Conversion: What the Transaction Looks Like
Once you hold a permanent policy, the process is standard. You will request an in-force illustration, sign a HIPAA authorization so life expectancy can be estimated from medical records, review offers, sign contracts, and let an independent escrow agent hold the funds until the insurer records the ownership change. Most states then provide a rescission window.
Budget about 60 to 120 days for the settlement itself, on top of however long the conversion takes. The GAO study of the market (GAO-10-775) found sellers typically received roughly 10% to 35% of face value; on a newly converted policy the surrender value is close to nothing, so the realistic comparison is against letting the coverage lapse for zero. Read what an in-force illustration is before you request one, and browse the education center for the rest of the process.
To begin, send the policy cover page or call (305) 209-7183.
Frequently Asked Questions
Can I sell a term life policy?
Usually only after converting it to permanent coverage, because term has no cash value and expires. The narrow exception is an insured with a serious health impairment and a long remaining level term period. Either way, the carrier’s permission is not needed to sell the contract you own.
Does Homesteaders Life sell term insurance?
Homesteaders Life Company writes almost exclusively pre-need funeral insurance through funeral homes, which is small-face whole life rather than term. If your paperwork looks like term, confirm the issuing company and product with the carrier as of 2026 before assuming anything.
What is a conversion privilege worth?
It lets you exchange term coverage for a permanent policy without a new medical exam, carrying your original health class forward. For someone whose health has declined, that is often the most valuable feature in the entire contract.
How do I find my conversion deadline?
Read the clause headed Conversion or Right to Exchange in your contract, then call the policyholder service number and ask for the exact last day in writing. Deadlines are set by attained age or by policy year, whichever comes first.
Should I convert first or get a review first?
Start the free review while you request the conversion quote, and convert only once you know the converted policy is a realistic candidate. Converting commits you to a much larger premium regardless of whether an offer materializes – just do not let the deadline pass while you deliberate.
My conversion right expired. Is there anything left to do?
If the insured is in ordinary health, the policy is generally not sellable and the decision becomes whether the coverage is still worth its premium. If there has been a serious health change and years remain on the term, a review is still worth requesting.
How long does everything take?
The settlement itself typically runs 60 to 120 days from first review to funded payment. Conversion paperwork adds time and must be completed inside the contractual window, so start early and tell everyone involved what the deadline is.
Find out what your policy is worth — free, confidential, no obligation.
A 15-minute educational review covers your eligibility, every alternative, and a realistic view of what each path would net you.
Related Reading
- What Policies Qualify For Life Settlement
- Is A Life Settlement Worth It
- What Is An In Force Illustration
- Education Center
- Sell My Homesteaders Whole Life Policy
- Sell My Homesteaders Variable 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.