Yes — a Madison National Life variable universal life policy can be sold if you and the policy qualify, and no carrier permission is needed. The buyer purchases the contract from you. This is a property right, not a favor the insurance company grants. Its involvement starts after closing, when it records the new owner and beneficiary.
VUL is the least stable policy type to evaluate, for one reason: its cash value lives in separate-account subaccounts that behave like mutual funds. The surrender value on this month’s statement is not the surrender value next month. Underneath that moving balance sits a stack of charges — mortality and expense risk fees, fund-level expenses, administrative charges, and a cost of insurance that rises every year with the insured’s age.
A note on the carrier: Madison National Life Insurance Company, of Middleton, Wisconsin, is principally a group-benefits carrier serving school districts and other public employers, and it came under Horace Mann following the 2022 acquisition of its parent company — confirm the current structure and A.M. Best rating with the carrier as of 2026. If what you hold is a group certificate rather than an individual variable policy, it must be converted before any sale is possible. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Madison National Life or Horace Mann.
In This Article
- Separate Account vs. General Account — Why It Matters to You
- The Charge Stack, Layer by Layer
- Buyers Value the Death Benefit and the Premium Load
- Ask for Illustrations at Several Assumed Returns
- If You Hold a Group Certificate
- Four Options for an Underfunded VUL
- Documents, Process, and What Not to Do
- Educational Only — No Advice, No Offer
- Frequently Asked Questions
Separate Account vs. General Account — Why It Matters to You
In a fixed universal life policy, your money sits in the insurer’s general account, earning a declared rate with a contractual minimum floor. In a variable policy, it sits in separate accounts — legally segregated investment subaccounts you selected, holding equities, bonds, or a money-market option.
Separate-account assets are not backed by a guaranteed minimum return. They rise and fall with markets. Two practical consequences follow:
- Any surrender value you were quoted is already stale. Re-check it before comparing it to anything. A comparison made in a rising month and acted on in a falling month is not the comparison you thought you were making.
- Timing pressure is real but not the way people assume. A market drop reduces your surrender alternative, which can make a settlement relatively more attractive. It does not necessarily reduce what a buyer will pay, because buyers are pricing the death benefit.
Background: how cash surrender value works.
The Charge Stack, Layer by Layer
VUL carries more cost layers than any other common policy type. Knowing them explains why so many policies sold in the 1990s and 2000s are underfunded today.
- Mortality and expense (M&E) risk charge — an ongoing asset-based fee against the separate account.
- Fund expense ratios — each subaccount charges its own management fee on top of the M&E charge.
- Cost of insurance (COI) — a monthly deduction based on the insured’s attained age and the net amount at risk. It rises every year and accelerates sharply after roughly age 70.
- Administrative and per-thousand charges — flat monthly fees plus charges scaled to the face amount.
- Surrender charges — in early policy years, these reduce what you would actually receive on surrender.
The dangerous interaction is between the account value and the COI. As the account value falls, the net amount at risk grows, which raises the COI charge, which drains the account faster. Market losses feed the same loop. A policy that looked comfortable at 62 can be projected to lapse at 79.
Buyers Value the Death Benefit and the Premium Load
It is natural to assume a bigger subaccount balance should produce a bigger offer. It usually does not work that way.
A buyer is acquiring a future death benefit and taking on the cost of keeping the policy alive until it pays. The subaccount balance is not a prize the buyer pockets — it is a reserve that offsets future charges. What gets modeled is the death benefit, the insured’s life expectancy, and the annual outlay required to carry the policy to that horizon.
A large balance helps modestly by reducing required premiums. But it simultaneously raises your surrender alternative, which is the number an offer must beat. On a heavily charged VUL with a modest balance, a settlement often wins clearly. On a richly funded VUL with a small death benefit, it may not. Work through is a life settlement worth it before assuming either way.
Ask for Illustrations at Several Assumed Returns
For a VUL, a single in-force illustration is not enough. Ask the servicing company to run it at multiple assumed rates of return:
- 0% — the stress test. What happens if the subaccounts go flat.
- A moderate assumed rate — the mid case.
- A higher assumed rate — roughly what you were probably shown at the point of sale.
In each version, find the year the account value reaches zero. That is the lapse year. If the 0% column shows lapse at 78 and you are 73, the policy is fragile no matter how good the optimistic column looks. Also ask whether your contract carries a no-lapse or secondary guarantee rider — many VUL policies sold in the 2000s do — and whether it is still intact.
Our walkthrough of reading an in-force illustration covers the columns line by line. These requests are free and you are entitled to them.
| Charge | How It Is Assessed | Direction Over Time |
|---|---|---|
| Mortality and expense (M&E) risk | Percentage of separate-account assets | Grows with the account balance |
| Subaccount fund expenses | Each fund’s own expense ratio | Varies by allocation |
| Cost of insurance | Attained age times net amount at risk | Rises every year, steeply after about 70 |
| Administrative and per-thousand fees | Flat monthly plus face-amount based | Largely level |
| Surrender charge | Declining schedule in early years | Falls to zero over time |
If You Hold a Group Certificate
Because Madison National’s business is weighted toward group life for public employers, confirm which document you have. A page headed “Certificate of Insurance” naming a school district, employer, or association is group coverage. The employer owns the master contract; a certificate is not transferable and cannot be sold.
The route to an ownable asset is conversion into an individual permanent policy, generally with no medical underwriting, within a window that is typically about 31 days after coverage ends. That deadline expires quietly. If you are retiring or leaving, ask the benefits office in writing for the conversion form, the exact deadline, the available products, and the premium — before your last day.
The converted premium will be much higher than a payroll deduction, since the employer subsidy disappears. Whether that trade makes sense depends on the face amount; Pine Lake generally works with death benefits of $100,000 or more, so check whether supplemental group life was also elected.
Four Options for an Underfunded VUL
Before selling, price every alternative:
- Increase funding. Paying more can restore the policy’s trajectory. Get an illustration solving for the premium required to carry it to age 100, then decide whether that number is realistic on your income.
- Reduce the face amount. A smaller death benefit lowers the net amount at risk and therefore the COI charge, often buying years. No cash to you, but coverage survives.
- Exchange or surrender. Surrender pays the current cash surrender value, net of any surrender charge and loan. Simple, immediate, usually the smallest of the cash options.
- Life settlement. A lump sum, premiums end. For qualifying policies, the federal GAO study of the market (GAO-10-775) found sellers typically received roughly 10% to 35% of face value, and on average about four to eight times surrender value — market-wide ranges, not a quote. See how much you can get for a policy.
Documents, Process, and What Not to Do
To start, send only the policy cover page — insurer, policy number, face amount, issue date, insured. That is enough for a free, no-obligation review.
If it advances: the most recent annual statement showing subaccount allocation, account value, surrender value and any loan; illustrations at several assumed returns; contract or prospectus pages listing the charge schedule; and a HIPAA authorization for life-expectancy underwriting, which you should read before signing.
Expect 60 to 120 days overall. Funds should sit with an independent escrow agent until the carrier confirms the ownership transfer, and most states provide a rescission window after funding.
What not to do: do not move your subaccounts to cash mid-transaction hoping to “lock in” value. It does not change what a buyer pays, it invalidates illustrations already in underwriting, and it removes the growth that helps carry the policy if the sale does not close. Leave the allocation alone and keep premiums current.
Send the cover page or call (305) 209-7183. Related: Madison National universal life and Madison National GUL.
Educational Only — No Advice, No Offer
This page is educational. It is not legal, tax, or investment advice, it is not a recommendation regarding any security including separate-account subaccounts, and it is not an offer to purchase any policy. Variable life insurance involves investment risk, including possible loss of value. Consult your own attorney, accountant, or licensed representative before acting.
Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Madison National Life Insurance Company, Horace Mann, or any employer plan sponsor.
Frequently Asked Questions
Can I sell a variable universal life policy without carrier approval?
Yes. The buyer purchases the contract from you, and the insurance company’s permission is not part of the transaction. The carrier records the new owner and beneficiary once the sale closes.
My surrender value changes constantly. Which figure should I use?
The current one on the day you are comparing. VUL cash value sits in separate-account subaccounts that move with the markets, so any earlier quote is stale. Re-check before signing anything.
Will a large subaccount balance get me a bigger offer?
Usually not much. Buyers price the death benefit, the insured’s life expectancy, and the premium load needed to carry the policy. A large balance lowers required premiums somewhat but also raises the surrender value an offer must beat.
What is the mortality and expense charge?
It is an ongoing asset-based fee the insurer deducts from the separate account for the risk and expenses it bears. It sits on top of each subaccount’s own fund expenses, which is why VUL carries a heavier cost load than fixed universal life.
Why do my charges rise even though my premium never changed?
The cost of insurance is based on the insured’s attained age and the net amount at risk. As the account value falls, the amount at risk grows and the charge grows with it, which drains the policy faster in a self-reinforcing loop.
Should I move my subaccounts to cash while a sale is pending?
Generally no. It does not change what a buyer pays, it invalidates illustrations already in underwriting, and it removes growth that helps carry the policy if the sale does not close. Keep premiums current and leave the allocation as it is.
What if my coverage is a group certificate through my district?
A certificate cannot be sold, because the employer owns the master contract. Conversion to an individual policy is required, typically within about 31 days of coverage ending. Ask your benefits office for the form and deadline in writing.
Does the Horace Mann acquisition affect my contract?
No. A policy that moves with an acquired block keeps its charge schedule, subaccount rights, and any guarantees exactly as written. Only servicing changes. Confirm the current structure and servicer with the carrier as of 2026.
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Related Reading
- Cash Surrender Value Life Insurance
- Is A Life Settlement Worth It
- What Is An In Force Illustration
- How Much Can I Get For My Life Insurance Policy
- How It Works Policy Options
- Sell My Madison National 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.