July 31, 2026
4:55 pm

Can I Sell My Homesteaders Life Whole Life Policy? (2026 Guide)

Yes – any carrier’s whole life policy can be sold in a life settlement when the policyholder and the policy qualify, because the buyer purchases the contract and the insurance company’s permission is not required. With Homesteaders Life, though, the honest answer for most owners is that the policy will not qualify, and this page explains exactly why so you do not waste weeks finding out the hard way.

Homesteaders Life Company is a mutual insurer based in West Des Moines, Iowa that writes almost exclusively pre-need funeral insurance, sold through funeral homes to fund a specific funeral arrangement. Those policies are typically modest in face amount – sized to a funeral, not to an estate – and the benefit is commonly assigned to the funeral home, often irrevocably. Both facts usually take a policy out of the settlement market. As of 2026, confirm your policy’s assignment status and face amount with the carrier and the funeral home.

Below: how to read your own statement, why size and assignment matter, and what your actual options are instead. 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

What a Pre-Need Whole Life Policy Actually Is
Two Reasons These Policies Usually Cannot Be Sold
How to Read Your Annual Statement
Why a Settlement Is Benchmarked Against Surrender Value
Before You Cancel a Funeral Policy – Read This
What to Do If You Also Own a Larger Policy
Alternatives When a Policy Is Too Small to Settle
Frequently Asked Questions

Can I Sell My Homesteaders Life Whole Life Policy? (2026 Guide)

What a Pre-Need Whole Life Policy Actually Is

A pre-need policy is life insurance used to pay for a funeral you arranged in advance. You sit down with a funeral director, select the goods and services, and fund that plan with a small whole life policy. The insurance company is the funder; the funeral home is the seller and, usually, the beneficiary or assignee.

Many pre-need contracts are also written on a growth or inflation basis, so the death benefit increases over time to keep pace with the cost of the funeral goods selected. That is a real consumer benefit, and it is the main reason people are glad they bought one. It is also a reason the contract does not behave like ordinary individual whole life.

Two Reasons These Policies Usually Cannot Be Sold

Size. Life settlement buyers underwrite each case individually – medical records, life expectancy reports, legal review, escrow. That fixed cost does not shrink with the policy. Pine Lake reviews policies with a death benefit of $100,000 or more, and most pre-need funeral policies are a fraction of that. A $12,000 or $20,000 funeral policy is simply below the economics of the market, no matter how well it was designed.

Assignment. To sell a policy you must be able to transfer full ownership free of competing claims. Pre-need policies are frequently assigned to the funeral home, and in many cases the assignment is irrevocable – often deliberately, because an irrevocable assignment is what lets a prepaid funeral be treated as an exempt asset in a Medicaid eligibility review under state rules. If your assignment is irrevocable, it generally cannot be unwound, and there is nothing free to sell.

Neither point is a criticism of the product or the company. A pre-need policy that does exactly what it was bought to do is a policy working correctly.

How to Read Your Annual Statement

Pull the most recent statement and find four lines:

Face amount / death benefit. If it is under $100,000, a settlement is very unlikely.
Cash surrender value. This is what the company would pay if you cancelled. On a small whole life policy it is a fraction of the face amount, especially in the early years. See how cash surrender value works.
Owner and beneficiary / assignee. If a funeral home appears, ask whether the assignment is revocable or irrevocable and get the answer in writing.
Outstanding policy loan. Any loan reduces both the death benefit and anything you would receive.

If the policy is participating, you may also see paid-up additions – dividends used to buy small chunks of extra permanent coverage. Paid-up additions raise the death benefit and the cash value, which is why an older participating policy is often worth more than the owner assumes.

Policy Detail	Where to Find It	What It Means for Selling
Face amount under $100,000	Cover page or annual statement	Below the settlement market – not sellable
Irrevocable assignment to a funeral home	Assignment form; confirm with carrier	Ownership cannot be transferred – not sellable
Revocable assignment, larger face amount	Assignment form	May be releasable; worth confirming in writing
Paid-up additions from dividends	Annual statement	Increase death benefit and cash value
Outstanding policy loan	Annual statement	Deducted from proceeds at closing
Growth or inflation-indexed benefit	Pre-need contract	Valuable for funding a funeral; not a settlement factor

Why a Settlement Is Benchmarked Against Surrender Value

When a whole life policy is large enough to interest buyers, the number to beat is not the death benefit – it is the cash surrender value. Surrender is the guaranteed alternative available to you at any time, so a settlement only makes sense when it clears that floor by a meaningful margin.

The federal GAO study of the market (GAO-10-775) found sellers typically received about 10% to 35% of face value, roughly four to eight times cash surrender value. Those figures come from policies that qualified – large individual contracts on insureds in their senior years, not funeral funding. Applying that multiple to a $15,000 pre-need policy is not how the math works, because those policies do not reach the market at all.

Also note: an outstanding policy loan is deducted at closing, and any paid-up additions form part of the death benefit being sold. Compare the options in settlement versus surrender.

Before You Cancel a Funeral Policy – Read This

People sometimes decide that if they cannot sell the policy, they will cancel it. Slow down. Cancelling a pre-need policy usually means:

The funeral arrangement is defunded, and the price you locked in disappears. Funeral costs generally rise; a growth policy was protecting you from that.
You receive only the cash surrender value, which is typically far less than the face amount and may be less than the premiums paid.
If the policy was made irrevocable for Medicaid eligibility purposes, cancelling could affect that treatment. Speak with an elder law attorney before touching it.

Talk to the funeral home and to the carrier first, and get any consequences in writing. This is exactly the kind of decision worth ten dollars of professional advice.

What to Do If You Also Own a Larger Policy

Here is where a review is genuinely worth your time. Families who bought a pre-need policy frequently also hold an older individual policy from a different company – a universal life bought in the 1990s, a converted group policy, a whole life from a career agent decades ago. Those are the policies the secondary market actually wants.

Do an inventory: check the safe deposit box, old tax files, and premium notices from any insurer. If any policy shows a death benefit of $100,000 or more and the insured is in their senior years, that one is worth a free review. Start with what policies qualify.

Alternatives When a Policy Is Too Small to Settle

Small policies still have options, even if selling is not one of them:

Keep it. A funded funeral is a real gift to your family. Doing nothing is often the right answer.
Reduced paid-up. Many whole life contracts let you stop paying and keep a smaller, fully paid death benefit.
Accelerated death benefit rider. Some policies allow early access to part of the benefit after a qualifying terminal or chronic illness diagnosis. Ask the carrier whether your contract includes one.
Policy loan. Borrow against cash value, understanding that interest accrues and unpaid loans cut the death benefit.
Surrender. The last resort, and usually the smallest payout.

More background is in the education center. If you believe your policy is $100,000 or larger, send the policy cover page for a free, no-obligation review or call (305) 209-7183 – and if it is not, we will tell you plainly.

Frequently Asked Questions

Can I sell a Homesteaders Life whole life policy?

Any policy can be sold if it qualifies, since the buyer purchases the contract and the carrier’s permission is not needed. In practice most Homesteaders policies are pre-need funeral coverage that is too small and often assigned to a funeral home, which usually rules out a settlement.

Why do buyers require a death benefit of $100,000 or more?

Each transaction carries fixed costs – medical underwriting, life expectancy reports, legal work and escrow – that do not shrink with a smaller policy. Below roughly that level the economics stop working for buyers, so small policies do not draw offers.

What does it mean that my policy is assigned to the funeral home?

An assignment directs the death benefit to the funeral home to pay for the arrangement you selected. If the assignment is irrevocable, ownership generally cannot be transferred to anyone else, so there is nothing available to sell. Ask the carrier and the funeral home to confirm your assignment status in writing.

Can I cancel a pre-need policy and take the cash?

Sometimes, but it usually defunds the funeral arrangement and pays only the cash surrender value, which is typically far less than the face amount. If the policy was made irrevocable for Medicaid eligibility purposes, cancelling may have consequences. Speak with an elder law attorney first.

What are paid-up additions?

On a participating whole life policy, dividends can be used to buy small amounts of extra fully paid coverage. Those additions increase both the death benefit and the cash value over time, which is why an older participating policy is often worth more than the owner expects.

Is a settlement compared to the death benefit or the surrender value?

Both matter, but the surrender value is the floor a settlement has to beat, because you can always surrender instead. The GAO’s market study found sellers typically received about 10% to 35% of face value, roughly four to eight times surrender value, on policies that qualified.

My policy is too small. What else can I do?

Consider keeping it, electing reduced paid-up coverage so premiums stop, asking whether an accelerated death benefit rider applies, or taking a policy loan. Surrender is usually the least valuable option. A funded funeral also has real worth to your family.

Is Pine Lake connected to Homesteaders Life?

No. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Homesteaders Life Company or any funeral home. This page is educational and is not legal, tax or investment advice.

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