Yes – a National Western Life variable universal life policy can be sold in a life settlement. Any carrier’s policy can be sold if the policyholder and the policy qualify, because the buyer is purchasing the contract from you and the carrier’s permission is not needed. National Western is not a party to the decision; it records the ownership change once the forms are filed.
VUL adds a wrinkle no other policy type has: your cash value sits in separate-account subaccounts that rise and fall with the markets. The surrender value your statement showed in January is not the surrender value in June. That volatility is why VUL owners are so often surprised by what their policy is – and is not – worth.
National Western Life has operated from Austin, Texas since 1956 and became part of Prosperity Life Group through S. USA Life Insurance Company in 2024; as of 2026, verify the servicing entity and service number on the carrier’s own website. If your contract is a registered variable product, your statements may also come from a broker-dealer relationship – confirm who holds the separate account records before requesting documents.
In This Article
What Makes VUL Different From Every Other Policy Type
A variable universal life policy is two products stitched together. There is a life insurance chassis – flexible premiums, a death benefit, and monthly deductions – and there is an investment account divided into subaccounts that work much like mutual funds. Because the subaccounts hold securities, VUL is a registered product sold with a prospectus, and it is regulated as a security in addition to being insurance.
The consequences for an owner thinking about selling: your cash value is a moving target, your policy has more internal charges than a plain universal life contract, and the paperwork may involve a broker-dealer as well as the insurance company. None of that stops a sale. It just means you should know the numbers before you shop.
The Charges Quietly Eating an Underfunded VUL
Four layers of cost come out of a VUL, and owners rarely see them itemized:
- Cost of insurance (COI). Deducted monthly, priced by attained age, and rising every single year. This is the big one in the insured’s 70s and 80s.
- Mortality and expense risk (M&E) charges. An asset-based charge against separate account value.
- Subaccount fund expenses. The internal expense ratio of each fund you are invested in.
- Policy and administrative fees. Flat monthly or annual charges.
When markets are strong and the policy is well funded, growth outruns those charges. When markets are flat and the policy is underfunded, the charges eat the account value from both ends – and because COI is charged on the net amount at risk, a falling account value actually increases the monthly charge. That is the death spiral many older VUL policies enter in the insured’s late 70s.
Why Buyers Ignore Your Subaccount Balance
Owners often assume a strong market year makes their policy more valuable to a settlement buyer. It generally does not, and the reason is worth understanding.
A buyer acquires the policy and then pays whatever premium is needed to keep the death benefit alive until it pays. Cash value is not money the buyer receives – it is money already inside the policy that offsets future premium outlay. So a larger account value slightly reduces the buyer’s carrying cost, but it does not increase the payout the buyer eventually collects. The death benefit does that.
What the buyer really prices is: death benefit, insured’s life expectancy, and the projected premium load required to carry the policy. A VUL with a high death benefit, a depleted account value, and an insured in their late 70s can be a better candidate than a well-funded policy on a healthy 60-year-old – even though the second one shows a much bigger number on the statement.
| What you look at | What it means to you | What it means to a settlement buyer |
|---|---|---|
| Death benefit | What heirs would receive | The entire payout being purchased – the primary driver of price |
| Subaccount / account value | The balance on your statement | Offsets future premium cost only; not money the buyer collects |
| Cash surrender value | What the carrier pays if you cash out | The floor an offer must beat to be worth considering |
| Cost of insurance trend | Why premiums keep rising | A core input to carrying cost |
| Insured age and health | Personal | Determines expected holding period and therefore price |
Documents: More Than a Standard Universal Life File
Start with the policy cover page – that is all a free review needs. A full file on a VUL usually includes:
- The most recent annual and quarterly statements, showing subaccount allocations and total account value.
- An in-force illustration run at multiple assumed rates of return. This is the VUL-specific step: ask for illustrations at 0%, at a low assumed rate, and at the maximum the carrier will illustrate. The 0% run shows you how soon the policy fails if the markets do not cooperate.
- The current cash surrender value net of any surrender charge and any outstanding loan.
- The full contract with riders and any no-lapse rider that may be attached.
- A HIPAA authorization for medical records.
Our in-force illustration guide explains how to read the columns and where the lapse year hides.
Comparing a Settlement to Your Other Exits
VUL owners have more levers than GUL owners, so put them all on the table:
- Reallocate to conservative subaccounts. Does not create value, but stops the volatility from making the lapse date unpredictable.
- Reduce the death benefit. Lowers the net amount at risk and therefore the monthly COI.
- 1035 exchange into a different permanent policy – sometimes useful, but a new policy means new underwriting unless the exchange is within the same carrier and product family.
- Surrender. Pays the cash surrender value, which on an aging VUL may be far less than you remember. Watch for surrender charges in the early policy years.
- Life settlement. A lump sum for the entire contract – typically more than surrender for policies that qualify. Market studies (GAO-10-775) put typical proceeds at roughly 10% to 35% of face value, and commonly four to eight times cash surrender value.
See settlement vs. surrender and the policy options overview for how retained death benefit arrangements work.
Timing and What Can Slow a VUL Down
Expect 60 to 120 days. Two things add time on variable contracts specifically. First, if a broker-dealer or registered representative is in the servicing chain, document requests can route through an extra desk. Second, account values must be re-verified close to closing because they move daily – a valuation from ten weeks ago is stale by the time contracts are signed.
Keep the policy funded throughout. A lapse mid-process ends the transaction and pays you nothing. And insist that funds sit in independent escrow until the carrier confirms the ownership change; never transfer ownership against a promise of later payment. Most states also give sellers a rescission window after funding.
Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of National Western Life Insurance Company or Prosperity Life Group. Send the policy cover page for a free policy review, or call (305) 209-7183. This page is educational only – not legal, tax, or investment advice.
Frequently Asked Questions
My VUL account value dropped this year. Is my policy worth less in a settlement?
Usually not much. Buyers price the death benefit and life expectancy, not the subaccount balance. A lower account value slightly increases the buyer’s future premium cost, but the death benefit being purchased is unchanged.
Do I need my broker-dealer’s permission to sell?
No. The policy owner controls the contract. A registered representative may be involved in servicing paperwork, but permission to sell your own property is not theirs to give. Neither is it the carrier’s.
What is the M&E charge on my policy?
The mortality and expense risk charge is an asset-based fee assessed against separate account value in variable products. It is disclosed in the prospectus and your annual statement. Ask the servicing company for a current itemization of all policy charges.
Should I move my subaccounts to cash before selling?
That is an investment decision and depends on your circumstances – talk to your own financial professional. From a settlement pricing standpoint it makes little difference, since buyers are not purchasing the account balance.
Will a surrender charge reduce my settlement proceeds?
No. Surrender charges apply when you cash out with the carrier. In a settlement you are selling the contract intact, so the surrender charge is not deducted from your purchase price – though it is one reason surrendering often pays less than selling.
Does National Western becoming part of Prosperity Life Group affect my VUL?
Your contract terms are unchanged. The 2024 transaction changed ownership at the company level. As of 2026, confirm the servicing entity, mailing address, and policyholder service number on the carrier’s own website before submitting requests.
How small is too small?
Below roughly $100,000 of death benefit, the fixed costs of underwriting, escrow, and closing usually make a settlement impractical. If your VUL is smaller than that, focus on reducing the death benefit or comparing surrender to keeping it.
How do I get a straight answer about my policy?
Send the policy cover page for a free policy review or call (305) 209-7183. Pine Lake is not affiliated with National Western Life, and this page is educational only – not legal, tax, or investment advice.
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Related Reading
- What Is An In Force Illustration
- Life Settlement Vs Surrender
- How It Works Policy Options
- How Much Can I Get For My Life Insurance Policy
- Sell My National Western Universal Life Policy
- Sell My National Western 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.