Most term policies face one gate. A Modern Woodmen term certificate faces two, and both have to open before a sale is possible at all.
The first gate is universal to term insurance: coverage only has secondary-market value while it can still be converted into permanent insurance. Buyers pay for death benefits they expect to collect, and level term almost always expires with the insured still living. The conversion right is what turns a temporary contract into an asset, and every conversion right has an expiration date that is frequently earlier than owners assume.
The second gate is specific to fraternal benefit societies. Modern Woodmen of America issues certificates to members, not policies to customers, and its articles and bylaws are typically incorporated into the certificate by reference. That can affect who may be named as beneficiary and whether the certificate may be absolutely assigned to an unrelated institutional buyer. If assignment is not permitted, the conversion question becomes academic.
Check the second gate first. It costs one written request and it can save you months.
In This Article
- Gate one: can the certificate be assigned at all?
- Gate two: the conversion deadline, in writing
- What Modern Woodmen term converts into, and why that changes the price
- Why an unconvertible term certificate has no market value
- The order of operations that protects your money
- Who this works for, and what to bring to a review
- Frequently Asked Questions
Gate one: can the certificate be assigned at all?
A life settlement is executed through an absolute assignment. The owner transfers every right in the contract — ownership, beneficiary designation, the right to pay premiums — to the buyer. That mechanism assumes the contract is freely assignable, which commercial life insurance generally is. Fraternal certificates are a different case.
Because coverage is written on the life of a member and membership is a condition of the contract, and because the society’s governing documents form part of the agreement, a fraternal certificate may restrict assignment, limit the class of permitted beneficiaries, or require the society’s consent to a transfer. Historically, many fraternal contracts confined beneficiaries to family members or dependents.
Send Modern Woodmen a written request for four things: the current certificate form and any amendments, the current articles and bylaws, the assignment provision, and a plain statement of whether an absolute assignment to a non-member third party is permitted. Do this before anyone orders medical records, before signing an application, and before paying any fee. Our explainer on what an absolute assignment does covers why this is the load-bearing step.
Two related facts belong in the same conversation. Modern Woodmen was founded in 1883, is headquartered at 1701 First Avenue in Rock Island, Illinois, and is regulated by the Illinois Department of Insurance under the fraternal benefit society provisions of the Illinois Insurance Code. And in most states, fraternal benefit certificates are excluded from state life and health insurance guaranty association coverage — a gap worth confirming with your own state’s insurance department if you are weighing where to hold long-term value.
Gate two: the conversion deadline, in writing
Contact Modern Woodmen member services with the certificate number and ask for written answers to five questions: is this certificate convertible today; what is the last calendar date a conversion application will be accepted; which permanent plans is it convertible into as of that date; is partial conversion permitted and at what minimum; and is conversion available on an original-age basis or attained-age only at this point.
Insist on writing. Conversion windows depend on the specific term plan, the issue age, the state of issue, and any extended conversion provision elected at application, and verbal answers on this point are unreliable across the entire industry.
The most expensive assumption is that conversion runs as long as the level premium does. Common structures close the window after a fixed number of certificate years — ten is typical — or at an attained age in the sixties, whichever arrives first. A 30-year level term bought at 40 can therefore lose convertibility at 65 while premiums stay level to 70. Because the secondary market becomes interested around 70, the window frequently shuts just before the certificate would have mattered. The standard framework is covered in how a term conversion rider works; your certificate and the bylaws control.
What Modern Woodmen term converts into, and why that changes the price
Modern Woodmen’s published life insurance lineup as of 2026 describes term, whole life and universal life coverage, along with plans for children and young adults. We could not confirm a currently marketed indexed universal life certificate under that name — WoodmenLife, the separate Omaha-based fraternal, is the organization frequently confused with it on that point.
That lineup shapes the conversion analysis. Whole life carries a fixed premium and a guaranteed cash value schedule, with dividends that are not guaranteed; buyers can model it cleanly, though the premium is often the highest of the available options. Universal life credits a declared interest rate against a guaranteed minimum and deducts a cost of insurance charge that climbs with attained age; a buyer must assume future declared rates and charge behavior, and will assume conservatively.
So when you request the eligible plan list, ask two follow-up questions for each option: what is the guaranteed premium that will carry the certificate to age 100 regardless of crediting, and is there any no-lapse guarantee provision. A plan with a strong guarantee prices better in the secondary market than one that requires the buyer to assume future crediting. Background on the fixed-premium option is in whole life insurance explained, and the flexible-premium mechanics are covered in our Modern Woodmen universal life guide.
| Gate | Question | Who answers it | If the answer is no |
|---|---|---|---|
| 1. Assignability | May the certificate be absolutely assigned to a non-member? | Modern Woodmen, in writing | No sale is possible; look at conversion for family needs only |
| 2. Conversion window | What is the last date a conversion application is accepted? | Modern Woodmen, in writing | Certificate has essentially no market value |
| 3. Eligible plans | Which permanent plans, and what is the guaranteed premium? | Modern Woodmen, in writing | Weaker guarantees mean lower offers, not necessarily none |
| 4. Insured profile | Age roughly 70+, or impaired, with $100,000+ face? | Life expectancy underwriting | Keep the conversion right alive and revisit later |
Why an unconvertible term certificate has no market value
Take a $400,000 20-year level term issued at age 54, now in certificate year 17 with the insured at 71 and in declining health. If it is still convertible, a buyer can quote the conversion cost, project premiums to life expectancy, and bid. If the conversion window closed in year 10, the same buyer sees coverage that ends in 36 months. The probability of a claim inside that window is low, and the price reflects it — which in practice means no offer.
Owners often point out that term does not truly vanish at the end of the level period, since most contracts allow annual renewal. True, and economically irrelevant. Post-level renewal rates commonly rise fivefold to tenfold in the first renewal year and climb steeply thereafter, because only impaired insureds choose to renew. No institutional buyer will underwrite that stream.
The narrow exception is a terminal or severely impaired insured whose documented life expectancy is shorter than the remaining level period. That is priced as a viatical case rather than a conventional life settlement, and it is governed by a different set of state rules. Outside that exception, the honest answer for an unconvertible term certificate is that there is nothing to sell — and hearing that early saves you the cost of finding out slowly.
The order of operations that protects your money
Converted permanent coverage is priced at the insured’s attained age once you are past the first few certificate years. On a $400,000 face for a 70-year-old, an annual premium in the range of $20,000 to $34,000 is realistic depending on plan and rate class. That is not an amount to spend speculatively.
Run the process in this order: confirm assignability in writing; confirm the conversion deadline and eligible plans in writing; obtain premium quotes at attained age for each eligible plan; complete life expectancy underwriting; collect and compare offers; and convert at or near closing, with the buyer funding or reimbursing the conversion cost. Converting first and shopping afterward is the most common self-inflicted loss in this market, and it is entirely avoidable. The full sequence is mapped in the life settlement process step by step.
Also ask about partial conversion. Most provisions allow converting only part of the face amount. A family that still needs $150,000 of protection but holds a $600,000 term can convert what it needs, keep it, and evaluate the balance separately — often a better result than treating the decision as all or nothing. The tradeoffs are set out in life settlement versus term conversion.
Who this works for, and what to bring to a review
Four conditions have to hold together. The insured is roughly 70 or older, or younger with a serious documented impairment. The face amount is $100,000 or more, and preferably $250,000 or more. The conversion window is open with enough runway to complete a transaction inside it. And the family has genuinely concluded the coverage is no longer needed. Age thresholds are discussed in more detail in age requirements for a life settlement.
It does not work when a spouse, a dependent, or a special-needs beneficiary would be left exposed; when the insured is healthy and in their early sixties, where projected life expectancy is too long to justify the conversion premium; when the conversion window has closed; or when the society will not permit assignment. A clear no in any of those cases is more valuable than an optimistic maybe, and it costs nothing to obtain.
Bring six items: the certificate cover page with plan name, issue date, face amount and level period; the conversion provision; the society’s written statement on assignability; the written last-conversion date and eligible plan list; premium quotes at attained age; and a candid health summary with treating physicians. That last item drives life expectancy underwriting, which drives valuation more than anything else. General eligibility questions for term coverage are covered in can a term life policy be sold.
Expect two to four months end to end if you proceed, most of it spent waiting on medical records and the society’s verification of coverage, and confirm that window fits inside the conversion deadline. Pine Lake Life Solutions does not purchase policies and is not licensed in every state. A free policy review reads the certificate, checks both gates, and tells you honestly whether pursuing this is worth your time.
Frequently Asked Questions
Can a fraternal benefit certificate be sold like an ordinary life insurance policy?
Not automatically. A sale requires an absolute assignment transferring all rights to a buyer, and fraternal coverage is tied to membership with the society’s articles and bylaws typically incorporated into the certificate. That can restrict assignment or limit permitted beneficiaries. Obtain a written statement from Modern Woodmen on whether assignment to an unrelated third party is permitted before anything else proceeds.
Are Modern Woodmen certificates covered by a state guaranty association?
Generally no. Most state life and health insurance guaranty association statutes expressly exclude benefits provided by fraternal benefit societies, so the backstop that applies when a commercial insurer fails does not apply in the same way. Confirm the exclusion for your own state through its insurance department, and weigh it against the society’s operating history and size.
How long does the conversion right on a term certificate last?
It varies by plan, issue age, state of issue and any extended conversion provision elected at application. Common industry structures close the window after a set number of years, often ten, or at an attained age in the sixties, whichever comes first – frequently well before the level premium period ends. Request the exact last conversion date from the society in writing.
Which permanent plan should I convert into if I intend to sell?
Ask for the guaranteed premium that will carry each eligible plan to age 100 regardless of crediting, and whether any carries a no-lapse guarantee. Plans with strong guarantees price better because the buyer can compute the cost of maintaining the contract precisely. Flexible-premium plans that depend on future declared rates force conservative assumptions and a corresponding discount.
Can I convert only part of my term certificate?
Most conversion provisions permit partial conversion, though a minimum amount usually applies. Converting the portion your family still needs and letting the rest expire is often better than treating the choice as all or nothing. Confirm with the society that partial conversion is available under your certificate, and get the minimum amount and the premium for the portion you intend to convert.
What if the society will not permit assignment?
Then a sale is off the table, and the useful questions become different ones: whether conversion still makes sense for a family that needs permanent coverage, whether a reduced amount would be affordable, and whether any living-benefit rider exists in the contract. That is a worse answer than a sale, but knowing it early prevents spending money on underwriting that leads nowhere.
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Related Reading
- What Is A Term Conversion Rider
- Can I Sell A Term Life Insurance Policy
- What Is An Absolute Assignment
- What Is Whole Life Insurance
- Life Settlement Vs Term Conversion
- Life Settlement Process Step By Step
- Age Requirements For A Life Settlement
- Sell My Modern Woodmen Indexed 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.