Yes — you can sell a National Life Group universal life policy in a life settlement, and you do not need the carrier’s permission to do it. A buyer purchases the contract from you, becomes the owner and beneficiary, and takes over the premium payments; the company simply records the ownership change on its standard form. Whether a sale is realistic comes down to the insured’s age and health, a death benefit of $100,000 or more, and whether the policy is economical for a buyer to keep in force.
Universal life is the single most commonly settled policy type, and the reason is structural. UL is flexible by design: you can pay more, pay less, or skip a payment, and the account value absorbs the difference. That flexibility hides a problem. The cost of insurance deducted every month rises as the insured ages, and eventually those deductions can outrun what the account value earns — which is how a policy that was funded properly for thirty years starts sending lapse warnings.
This page explains how a buyer reads a UL, why an in-force illustration is the document that decides everything, and how to compare an offer against simply letting the policy go. Pine Lake Life Solutions is not affiliated with National Life Group or Life Insurance Company of the Southwest. Nothing here is tax, legal or investment advice.
In This Article
- Cost of Insurance: The Charge That Quietly Grows
- The In-Force Illustration Decides Everything
- Which Company Services Your Contract
- What Buyers Look For in a Universal Life Policy
- Offer Versus Lapse Versus Surrender, With Numbers
- Step by Step: What the Process Looks Like
- Red Flags and Questions to Ask
- Tax Treatment and Benefit Coordination
- Frequently Asked Questions
Cost of Insurance: The Charge That Quietly Grows
Every month a universal life policy deducts a cost-of-insurance charge based on the insured’s age, the net amount at risk, and the carrier’s current rate scale. At 55 the charge is small. At 80 it is a different order of magnitude. As long as the account value and the premiums keep pace, nothing looks wrong. When they stop keeping pace, the account value starts draining, which increases the net amount at risk, which increases the charge again.
That feedback loop is why so many UL owners in their seventies and eighties suddenly face a premium demand many times what they had been paying. It is also why UL is attractive on the secondary market: the owner is often ready to walk away from a large death benefit that a buyer, with different economics, is happy to keep funding. Your annual statement shows the monthly deductions — find that section and look at the trend over the last three statements.
The In-Force Illustration Decides Everything
An in-force illustration is a projection the carrier runs on your actual policy as it stands today. Request at least two versions: one at guaranteed maximum charges and minimum crediting, and one at current charges and current crediting. Also ask for the minimum premium required to carry the policy to a specific age, such as 95 or 100.
That last figure is the number a buyer prices against, because it is their future cost. It is also the number that tells you the truth about your own situation. If keeping a $400,000 death benefit to age 95 requires $22,000 a year that you do not want to spend, you have your answer about whether the policy is still doing its job. Carriers commonly take a few weeks to produce an in-force illustration, so request it at the very start of the process.
Which Company Services Your Contract
National Life Group is a marketing brand for a family of companies; the underwriting entity on individual policies is usually either National Life Insurance Company, a Vermont insurer chartered in 1848, or Life Insurance Company of the Southwest, its Texas affiliate. Check the first page of your contract for the entity that issued it and the most recent premium notice for the current service phone number, as of 2026.
The group has operated under a mutual holding structure rather than as a publicly traded stock company, so there is no policyholder demutualization stock to chase down as there is with a few other carriers. For a settlement, none of this changes your rights — it only determines which service center receives the change-of-ownership and absolute assignment paperwork. Confirm the current form version with the carrier directly rather than using a form downloaded from a third-party site.
What Buyers Look For in a Universal Life Policy
Buyers underwrite the insured, not the paperwork. The strongest candidates are insureds age 70 and above, or younger insureds with a documented decline in health, holding death benefits of $250,000 or more with low remaining account value and moderate required premiums. Low account value actually helps, because the buyer is not being asked to pay you for money you could withdraw yourself.
What weakens a case: excellent health for the insured’s age, a very high minimum premium relative to the death benefit, a large outstanding loan, or a policy still within its two-year contestability period. Policies originally arranged with the intent of reselling them — stranger-originated life insurance — are illegal in most states and will not be purchased.
| Document | Where to get it | Why the buyer needs it | Typical wait |
|---|---|---|---|
| Policy cover page | Your policy binder | Confirms owner, insured, face amount, issue date | Immediate |
| Most recent annual statement | Carrier service center or online account | Shows account value, charges, loan balance | Days |
| In-force illustration at current charges | Carrier, by written request | Projects future premium needed — the buyer’s cost | Two to four weeks |
| Medical records | Physicians, via HIPAA authorization | Life expectancy underwriting | Three to eight weeks |
| Change of ownership form | Carrier | Records the transfer of the contract | Days after signing |
Offer Versus Lapse Versus Surrender, With Numbers
Consider a labeled hypothetical: a $400,000 UL with $6,000 of account value, a surrender value near zero after surrender charges, and a required premium of $18,000 a year to keep it alive. Letting it lapse pays nothing and wastes decades of premiums. Surrendering pays almost nothing. A settlement is the only path that turns the policy into cash.
Market-wide research (GAO-10-775) found sellers typically received roughly 10% to 35% of face value and, on average, several times cash surrender value. On a policy with essentially no surrender value, the multiple comparison is meaningless and the percentage-of-face framing is the useful one — but the only number that counts is an actual underwritten offer. Anyone who quotes you a figure before seeing a statement and an illustration is guessing.
Step by Step: What the Process Looks Like
First, a free policy review based on your cover page determines whether the policy is worth pursuing. Second, you complete an application and HIPAA authorization so medical records can be ordered. Third, life expectancy underwriting is performed and the policy is presented to buyers. Fourth, an offer is made, and you accept or decline with no obligation.
Fifth, closing documents are signed, funds go into a third-party escrow account, and the change of ownership is filed with the carrier. Sixth, the carrier confirms the transfer and escrow releases the money to you. Finally, the state rescission period runs, during which you can undo the transaction by returning the proceeds. Total elapsed time is typically 60 to 120 days.
Red Flags and Questions to Ask
Ask four questions of anyone you talk to: How are you paid, and by whom? Is my policy being shopped to more than one buyer? What is my state’s rescission period? Will you put the offer and its conditions in writing? Vague answers to any of those are a reason to stop.
Walk away from upfront fees, from same-day signing pressure, from anyone who tells you a settlement is always the best option, and from anyone who discourages you from talking to your CPA or attorney first. A legitimate review sometimes ends with the recommendation that you keep the policy. If you want a plain-spoken assessment, send your policy cover page for a free policy review or call (305) 209-7183.
Tax Treatment and Benefit Coordination
In general, settlement proceeds are analyzed in tiers against your cost basis and the policy’s cash surrender value, and the pieces are taxed differently. The Tax Cuts and Jobs Act of 2017 removed a rule that had reduced sellers’ cost basis by cumulative cost-of-insurance charges, which generally improved the after-tax result for sellers of universal life. Your CPA should apply this to your actual premium history.
If the proceeds are meant to pay for assisted living, home care or a nursing home, coordinate with an elder law attorney before closing. Medicaid counts assets and examines transfers within a look-back window, so the sequence of receiving and spending the money can matter as much as the amount. Plan it in advance rather than fixing it later.
Frequently Asked Questions
Why is universal life the most commonly sold policy type?
Because its cost-of-insurance charges rise with age, UL policies often become expensive exactly when the owner no longer needs the coverage. That combination — a large death benefit the owner wants to abandon and a buyer willing to fund it — is what the secondary market exists to solve. Flexible premium design also means little or no surrender value stands in the way.
My policy has almost no cash value. Can I still sell it?
Yes, and low cash value is often helpful rather than harmful. The buyer is purchasing the future death benefit, not the account value, so a low balance means less of the price is compensating you for money you could withdraw anyway. What matters more is the premium required to keep the policy in force.
What is an in-force illustration and why does it matter so much?
It is a projection the carrier runs on your policy as it exists today, showing how long it will last under different premium and crediting assumptions. Buyers use the minimum premium to a target age as their cost estimate. Request it early, because carriers commonly take two to four weeks to produce one.
Does National Life Group or LSW have to consent to the sale?
No. The carrier processes a change of owner and beneficiary using its standard form; it does not approve the transaction itself. Confirm the current form and any notarization or signature-guarantee requirements with the service center listed on your premium notice.
What if the policy is owned by a trust?
Trust-owned policies are sold regularly. The trustee signs the transfer documents, and the carrier and buyer will want a copy of the trust or a trust certification confirming the trustee’s authority. Sorting out signing authority early prevents delays at closing.
How much will I receive?
It depends on underwriting, and no honest answer exists before documents are reviewed. Federal research (GAO-10-775) reported sellers typically received about 10% to 35% of face value. Your figure turns on the insured’s life expectancy, the face amount, and the ongoing premium the buyer must pay.
Can I sell only part of my policy?
In some cases yes — a partial or retained-benefit arrangement lets you keep a portion of the death benefit for your family while the buyer pays the premiums on the whole policy. Not every policy supports it and not every buyer offers it. Ask specifically whether a retained-benefit option is available for your contract.
What happens during the rescission period?
After funding, state law gives you a window to reverse the sale by returning the proceeds, and ownership goes back to you. The length varies by state and in some states it is measured differently. Ask for your state’s rescission terms in writing before you sign closing documents.
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
- Sell My National Life Group Guaranteed Universal Policy
- What Is A Rescission Period
- Education Center
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.