Yes. A Liberty Bankers Life universal life policy can be sold in a life settlement if you and the policy qualify, because you own the contract and the buyer is purchasing it from you. The carrier’s permission is not needed and the carrier is not a party to the decision, whether the policy was originally issued under the Liberty Bankers name or under a company it later acquired.
Universal life is the most frequently sold policy type in the secondary market, and the reason is structural. UL charges a monthly cost of insurance that rises with the insured’s age, funded out of an account value that earns whatever the company credits. Contracts sold in the 1980s and 1990s were illustrated at 8 to 12 percent. Most now credit near their guaranteed minimum, which means the account value that was supposed to carry the policy into the insured’s eighties has been quietly draining instead.
This guide explains how to see that in writing before it happens, and what to do about it. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Liberty Bankers Life. Education only, not legal, tax or investment advice.
In This Article
First, Identify Who Services the Contract
Liberty Bankers Life is based in Dallas, Texas, and expanded largely by acquiring smaller life insurers and closed blocks of business. Many owners therefore hold a universal life contract printed with a predecessor company’s name while their statements arrive from a different service center. This is normal, and it changes nothing about the contract’s terms or your right to sell.
What it does change is logistics. Owner-change forms, in-force illustration requests and loan payoff quotes all have to go to whichever entity actually administers the policy today. Call the number on your most recent premium notice and confirm the servicing company, the correct address, and the current financial strength rating. Verify those with the carrier as of 2026 instead of assuming.
The Interest Rate Problem in Older UL Contracts
Here is the mechanic that catches people. When these policies were sold, the illustration assumed the account value would earn a high crediting rate indefinitely. The planned premium was set on that assumption. Interest rates fell for decades afterward, and most older contracts drifted down to the guaranteed floor, often in the 3 to 4 percent range depending on the contract.
Meanwhile the cost of insurance charge kept climbing with the insured’s age, as designed. Less credited interest coming in, larger charges going out, and the same premium being paid as always. The result is an account value that shrinks each year and, eventually, a policy that lapses while the insured is still living. Decades of premiums then produce nothing at all.
The In-Force Illustration Tells You the Lapse Year
Request an in-force illustration from the servicing company, and ask for two versions: one at current assumptions and one at guaranteed assumptions. Also ask for a third showing the premium required to carry the policy to age 100 or to maturity. These are free, and they are the only way to see the future the contract is actually on track for.
Find the year in which the account value reaches zero. That is your lapse date, and for many older UL contracts it arrives well before the insured’s life expectancy. A buyer’s pricing model is built around exactly that number, plus the premium needed to push it out. If you have never read one, our guide to the in-force illustration explains each column.
| What Changed Since Issue | Effect Inside the Policy | What the Owner Usually Notices |
|---|---|---|
| Crediting rate fell toward the guaranteed floor | Less interest added each month | Account value grows slower, then shrinks |
| Cost of insurance rose with age | Larger monthly deduction | Same premium no longer covers charges |
| Planned premium never increased | Funding gap widens each year | A lapse warning letter arrives |
| Loans taken against the policy | Interest accrues, benefit reduced | Lower net value at any exit |
| Block acquired by another company | Servicing address changes | Statements arrive under a new name |
What a Buyer Is Actually Paying For
A settlement buyer is not buying your account value. They are buying the death benefit, and pricing it against two things: an estimate of the insured’s life expectancy, and the cost of keeping the policy in force until then. Cash value matters only as a cushion that delays the point at which premiums come out of pocket.
That is why a UL policy with almost no remaining cash value can still be worth real money, while surrendering the same policy returns very little. The GAO’s market study (GAO-10-775) found sellers typically received roughly 10 to 35 percent of face value, about four to eight times cash surrender value. Where any specific policy falls depends on age, health, face amount and required premium. See what a policy can bring.
Documents to Gather
Send the policy cover page first. Insurer, policy number, face amount, issue date and insured are all that a free review needs to tell you whether the policy is realistic.
For a full file: the most recent annual statement showing account value, surrender value and loan balance; the in-force illustrations described above; the complete contract with all riders and any endorsements from the acquiring company; a written loan payoff quote if you have borrowed; and a HIPAA authorization for the life expectancy review. Keep any medical authorization specific and revocable, and ask who will hold the records.
Timeline, Escrow and Rescission
Budget 60 to 120 days from application to money in hand. The stages are a free review, document collection, medical records and life expectancy reports, offers and negotiation, contracts, the carrier’s processing of the ownership change, and funding. Older acquired blocks sometimes take longer on the paperwork because service centers have changed hands.
Two non-negotiables. Funds should be held by an independent escrow agent and released only after the carrier confirms the ownership change in writing. And most states give you a rescission window after closing to unwind the sale by returning the proceeds. Ask what applies where you live before you sign, and get every offer in writing showing gross and net numbers.
Is Selling the Right Call?
Selling usually makes sense when the illustration shows the policy lapsing during the insured’s lifetime, when premiums have become a strain, when the coverage is no longer needed, or when cash today matters more than a benefit later. In those situations a settlement turns a depreciating contract into usable money.
It makes less sense when heirs depend on the death benefit and the premium is affordable, or when the face amount is small. Liberty Bankers Life’s retail book has emphasized final expense coverage with modest face amounts, and policies under roughly $100,000 generally cannot support the fixed costs of a transaction. Check whether a settlement is worth it, send the cover page for a free review, or call (305) 209-7183.
Frequently Asked Questions
Does the carrier have to approve the sale of my universal life policy?
No. The policy is your personal property and the buyer purchases the contract from you. Liberty Bankers Life is not a party to your decision and its permission is not required. The company records the new owner and beneficiary after closing.
Why does my contract show a company name I do not recognize?
Liberty Bankers Life expanded largely by acquiring smaller insurers and closed blocks, so many contracts were issued under predecessor names. Your terms and guarantees are unchanged. Confirm the current servicing company with the number on your latest statement.
My policy has a lapse warning. Can I still sell it?
Often yes, and the warning is a reason to move quickly rather than a disqualifier. Buyers expect underfunded universal life. What matters is that the policy is still in force during the transaction, so keep paying at least the minimum required while a review is underway.
How do I get an in-force illustration?
Call the policy service number and request one at current assumptions and one at guaranteed assumptions, plus a version showing the premium needed to reach age 100. Ask for them in writing. Turnaround is commonly one to three weeks, so request them early.
Is a policy with no cash value worthless?
No. Buyers pay for the death benefit, not the account value. A universal life policy with almost nothing left inside it can still draw a meaningful offer, which is exactly why surrendering such a policy is usually the weakest option available.
How much could I receive?
The federal GAO study (GAO-10-775) documented typical proceeds of roughly 10 to 35 percent of face value, about four to eight times cash surrender value. Your figure depends on age, health, face amount and the premium required to keep the policy in force.
Are the proceeds taxable?
Part of the payment may be. Treatment depends on your cost basis and your health status, and rules can change. This page is not tax advice. Ask a CPA to model the outcome for your situation before you close a transaction.
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Related Reading
- What Is An In Force Illustration
- How Much Can I Get For My Life Insurance Policy
- Is A Life Settlement Worth It
- Life Settlement Vs Surrender
- Sell My Liberty Bankers Whole Life Policy
- Sell My Liberty Bankers Guaranteed 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.