Yes – if you own a universal life policy issued by or serviced through Lafayette Life, you can sell it in a life settlement, and the carrier’s permission is not part of the process. The buyer purchases the contract, becomes owner and beneficiary, and takes over the premiums. Whether a sale is realistic depends on the insured’s age and health, a death benefit generally of $100,000 or more, and how much it costs to keep the policy alive.
One thing to sort out first. Lafayette Life’s publicly described product portfolio in 2026 centers on whole life, term life, and fixed and indexed annuities – not a headline universal life lineup. If your contract is universal life, it may be an older block, or it may have been issued by another Western & Southern member company and merely be serviced alongside your other paperwork. Confirm the issuing company and the servicing company before you do anything else; do not assume from the logo on an envelope.
This guide covers why universal life is the most frequently settled policy type, what the in-force illustration reveals, how buyers price these contracts, and when a sale is the wrong move. Pine Lake Life Solutions is not affiliated with The Lafayette Life Insurance Company or Western & Southern Financial Group.
In This Article
- First, Confirm Who Issued and Who Services the Contract
- Cost of Insurance Is Why Universal Life Gets Sold
- The In-Force Illustration Is the Document That Decides
- How Buyers Price a Universal Life Policy
- Documents to Pull Together
- Closing, Escrow, and Keeping the Policy Alive
- Taxes and Benefit Eligibility, in General Terms
- When You Should Keep the Policy Instead
- Frequently Asked Questions
First, Confirm Who Issued and Who Services the Contract
Lafayette Life was incorporated in 1905 in Lafayette, Indiana, restructured its corporate form in 2000, and became part of Western & Southern Financial Group in 2005, with operations run out of Cincinnati. It never went into runoff and never sold off its retail block, which is good news – but Western & Southern is a group of several life companies, and families routinely mix up which member company issued which policy.
Do this: take the policy number and the service phone number from your most recent annual statement or premium notice, call, and ask two questions. Which company is the issuing carrier on this contract, and which service center handles in-force illustrations and change-of-ownership requests for it? Get the answer in writing. Every later step – the illustration, the assignment form – routes through that answer.
Cost of Insurance Is Why Universal Life Gets Sold
Universal life is the most commonly settled policy type in the secondary market, and the mechanism is always the same. Each month the carrier deducts a cost-of-insurance charge from the account value, based on the amount at risk and the insured’s attained age. That charge climbs gently through the sixties and steeply after that. Interest credited to the account value pushes back. When charges outrun crediting, the account value drains, and when it reaches zero the policy lapses – regardless of how faithfully the original premium was paid.
Owners typically discover this in their late seventies, in the form of a letter proposing a much higher premium or an illustration showing lapse within a few years. It is not a defect; it is how the product was designed. But it arrives at exactly the age where a settlement offer becomes competitive, which is why these two facts keep meeting.
The In-Force Illustration Is the Document That Decides
Request it from the carrier before making any decision, and request it in a specific form. Ask for one run at your current premium and current assumptions, showing when the policy lapses. Then ask for a solve: the annual premium required to carry the policy to age 100 at guaranteed charges and minimum crediting.
That second number is the one buyers care about, because it is the carrying cost they must budget. It also tells you the truth about your own exposure if you keep the policy. An illustration showing lapse at 82 for an insured aged 79 is not a reason to panic – it is often the clearest argument that doing nothing is the most expensive option on the table. Allow a couple of weeks for the carrier to produce these.
How Buyers Price a Universal Life Policy
The valuation is expected death benefit, less expected premiums, discounted to present value. Three inputs dominate: the face amount, the insured’s life expectancy, and the premium required to keep the contract in force. Nothing about the carrier’s brand changes the math.
Here is a clearly hypothetical illustration of how sensitive it is. A $350,000 universal life policy, insured age 80, with a $6,500 annual premium to sustain it and a $9,000 net surrender value, is an attractive case – low carrying cost, older insured. Change nothing except the premium, raising it to $24,000 because cost-of-insurance charges have escalated, and the offer falls sharply, because the buyer must fund that premium every year it holds the policy. Secondary-market offers commonly range from roughly 10% to 35% of face, and where a specific case lands is driven by those inputs.
| Question to ask the carrier | Why it matters | Get it in writing? |
|---|---|---|
| Which company issued this policy? | Western & Southern includes several member companies | Yes |
| What premium keeps it in force to age 100 at guaranteed charges? | This is the buyer’s carrying cost | Yes |
| What is the current net cash surrender value? | The floor any offer must beat | Yes |
| What is the loan payoff amount today? | Reduces net proceeds of every option | Yes |
| Which death benefit option applies? | Option B can exceed the stated face amount | Yes |
| Which form transfers ownership? | Required to complete a settlement | Yes |
Documents to Pull Together
Six items make a universal life case reviewable: the policy cover page; the most recent annual statement showing account value, surrender value, death benefit option, and any loan; an in-force illustration at current assumptions; a premium solve at guaranteed assumptions; a written loan payoff quote if you have borrowed; and health information for the insured.
Check the death benefit option on the statement. Option A pays a level face amount; Option B pays face plus account value. If you are on Option B, the amount a buyer prices can exceed the face figure printed on the cover page, and you want the statement to show it clearly. A free policy review needs only the cover page to begin – the rest can follow.
Closing, Escrow, and Keeping the Policy Alive
The overall timeline is 60 to 120 days, with medical records and the life expectancy assessment consuming most of it. After you accept an offer, closing documents are signed, funds are placed in escrow, and the carrier is sent the change-of-ownership and beneficiary-change forms. Escrow releases once the carrier confirms the transfer on its books. Most states then provide a rescission period during which you may unwind the sale and return the money.
One instruction matters more than any other: keep paying the premium until the transfer is confirmed. A universal life policy that lapses in the middle of a transaction is worth nothing, and reinstating it may require evidence of insurability the insured cannot provide.
Taxes and Benefit Eligibility, in General Terms
Life settlement proceeds are generally analyzed in three layers: amounts up to your cost basis are typically received tax-free, amounts between basis and the cash surrender value are typically ordinary income, and anything above that is generally treated as capital gain. A universal life policy with a small surrender value and a strong offer can therefore generate a meaningful gain component.
For Medicaid, the key point is that cash counts differently than an in-force policy with limited cash value, and transfers during the look-back period can create a penalty period. These are descriptions of general rules, not advice about your situation. Have your tax professional review the closing statement and, if care funding is the goal, involve an elder law attorney before you sign.
When You Should Keep the Policy Instead
If someone still depends on the death benefit, keep it and attack the premium problem directly. Most universal life contracts can be reduced to a smaller face amount the account value can actually sustain – a $150,000 policy that lasts is worth more to a family than a $350,000 policy that lapses at 84.
If the insured is terminally or chronically ill, read the contract for an accelerated death benefit or chronic illness rider. That route pays through the carrier, typically much faster and with far less third-party process. And if the surrender value is modest but the policy is nearly free to carry, the honest conclusion may be that there is not enough at stake to justify four months of paperwork. A straight review should tell you that rather than talk you into a transaction.
Frequently Asked Questions
My policy says Lafayette Life but I am not sure it is universal life. How do I check?
The policy type is printed on the cover or declarations page, and the annual statement will show an account value and monthly deductions if it is universal life. If the paperwork is ambiguous, call the service number on your premium notice and ask the carrier to state the product type and issuing company.
Does Lafayette Life have to consent to the sale?
No. The carrier records the new owner and beneficiary after closing but plays no role in approving the transaction. Transferring a policy you own is a property right.
Is Lafayette Life financially strong?
AM Best affirmed a Financial Strength Rating of A+ (Superior) for Western & Southern’s life subsidiaries including Lafayette Life, revising outlooks to positive in an April 2026 action. Verify current ratings at ambest.com. Financial strength affects claims payment, not your ability to sell.
Why is my premium suddenly not enough?
Because cost-of-insurance charges inside a universal life policy rise with the insured’s attained age. If credited interest no longer covers those rising charges, the account value drains and the carrier will ask for more premium to prevent lapse.
What is an in-force illustration and does it cost anything?
It is a carrier-produced projection of how your policy performs going forward under stated assumptions, and carriers provide it at no charge. Request it in writing and allow roughly two weeks.
Can I keep part of the death benefit?
Sometimes. A retained death benefit arrangement lets a buyer take part of the face amount while a portion stays with your beneficiary and the buyer pays the premiums. It is not available in every case but it is worth asking about.
What if my policy is about to lapse?
Act quickly and keep the policy in force in the meantime. A lapsed policy cannot be sold, and reinstatement may require medical evidence that an older or unwell insured cannot provide.
How do I start without committing to anything?
Send the policy cover page for a free policy review, or call (305) 209-7183. There is no obligation and you should never pay an upfront fee just to learn what a policy is worth.
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
- Life Settlement Vs Surrender
- How It Works Policy Options
- What Is A Life Settlement Broker
- Sell My Lafayette Life Whole Life Policy
- Sell My Lafayette Life Term 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.