Yes — an Ohio National variable universal life policy can be sold in a life settlement, because the policy is your personal property and a buyer purchases the contract from you; the insurance company’s permission is not needed. Variable universal life is a securities product as well as an insurance contract, which adds paperwork but does not change your ownership rights. Once the sale closes, the servicing company records the new owner and beneficiary.
Ohio National owners should establish one fact before anything else: who administers the contract today. The Cincinnati insurer, founded in 1909, moved from a mutual holding structure to a stock company under Constellation Insurance Holdings — backed by the Ontario Teachers’ Pension Plan and CDPQ — in a transaction announced in 2021 and completed the following year. The company had also stopped selling annuities in 2018, which left many clients unsure what happened to the life side. Verify the current servicing entity with the number on your statement.
This guide covers how subaccount performance and rising insurance charges interact in a VUL, which documents matter, and how a settlement compares with the alternatives. Pine Lake Life Solutions is not affiliated with Ohio National or Constellation Insurance.
In This Article
How a VUL Gets Into Trouble
Variable universal life puts your premium into subaccounts that work like mutual funds. The account value rises and falls with those investments, and there is generally no guaranteed floor. Every month the policy deducts a cost of insurance charge, administrative charges, and the fund-level expenses inside the subaccounts.
Two forces work against the policy in later years. Subaccount returns are unpredictable — a bad stretch in the markets can cut the account value sharply. Meanwhile cost of insurance climbs relentlessly with the insured’s age, and it is charged as a percentage of the amount at risk, so a falling account value actually increases the charge. That feedback loop is the classic VUL lapse path.
Owners in their late seventies and eighties often find they are paying multiples of the original premium just to hold the policy together. If the coverage is no longer needed, that is money going out the door for nothing. A settlement is the alternative to walking away.
Reading Your VUL Statement Honestly
VUL statements are dense. Focus on five lines:
- Total account value today, and how it compares with a year ago and with the original illustration.
- Cash surrender value — account value less any remaining surrender charge, which older contracts often still carry.
- Monthly deductions, specifically the cost of insurance component and its year-over-year trend.
- Subaccount allocation — how much sits in equities versus a fixed account.
- Loan balance, if any, plus accrued interest.
Then request an in-force illustration from the servicing company. For a VUL, ask for it at a conservative assumed rate of return and at the guaranteed maximum charges, not at an optimistic assumption. That is the version that tells you the truth about how long the policy survives, and it is closer to how a buyer will model it.
The Securities Wrinkle: Prospectus and Registered Products
Because subaccounts are registered securities, VUL contracts come with a prospectus and are sold by registered representatives. Practically, that means a few extra documents in the file: the current prospectus or product supplement, subaccount performance reporting, and sometimes a suitability record from the original sale.
It also means the ownership change may route through a slightly different service unit than a plain universal life policy would. When you call, say specifically that the contract is a variable universal life policy so you reach the right desk on the first try.
None of this changes the fundamentals. The buyer is acquiring a death benefit and the obligation to keep it in force. The subaccounts come along, and the buyer typically reallocates them conservatively after closing — which is a reasonable thing to do with an asset whose only job is to stay alive.
| VUL Feature | Effect on the Policy | Effect on a Settlement Offer |
|---|---|---|
| Subaccounts invested in equities | Account value swings with markets; no guaranteed floor | A depleted account value lowers the offer but rarely disqualifies the policy |
| Rising cost of insurance | Monthly deductions grow with the insured’s age | Higher required premium reduces what a buyer can pay |
| Large death benefit | Higher amount at risk, higher charges | Generally raises the offer; $100,000 is a common practical floor |
| Outstanding policy loan | Lien against the death benefit, interest accrues | Netted out of any offer dollar for dollar |
Sell, Reallocate, or Reduce Coverage?
Before selling, price the in-house fixes:
- Reallocate to the fixed account. Moving out of volatile subaccounts removes market risk from a policy whose only purpose now is to stay in force. Returns will be modest, but so will the swings.
- Reduce the face amount. Lower death benefit means lower cost-of-insurance charges and a longer runway.
- Switch death benefit option. If the policy pays face plus account value, moving to a level death benefit reduces the amount at risk and the charges.
- Surrender. You receive cash surrender value, and any surrender charge comes off.
- Life settlement. A lump sum for the whole contract, typically well above surrender value for a qualifying policy.
Our comparison of settlement versus surrender and the overview of policy options lay out how these stack up.
What a VUL Might Be Worth
The honest ranges come from published research, not from anyone’s sales pitch. The GAO’s market study (GAO-10-775) found sellers typically received about 10% to 35% of face value, and roughly 4 to 8 times what surrendering would have paid.
For VUL specifically, an eroded account value is not necessarily bad news for an offer. The death benefit is what a buyer is acquiring; a thin account value simply means the buyer must fund more premium, which lowers the price but does not disqualify the policy. What genuinely helps is a large face amount, an insured whose life expectancy estimate is shorter than standard, and modest required premiums.
What hurts: small face amounts, heavy policy loans, and contracts where the surrender value is already close to what the death benefit is worth in present-value terms.
Documents, Assignment, and Escrow
Start with one page — the policy cover page, showing issuing company, policy number, face amount and issue date. That is all a free review requires.
Then: the most recent annual statement, the in-force illustration run conservatively, and the current prospectus if the servicing company provides one on request.
The transaction turns on a change of ownership, usually an absolute assignment on the insurer’s own current form, frequently requiring notarization. Request the packet from the service center directly. Your funds should be held by an independent escrow agent and released only after the insurer confirms the transfer — never sign over ownership against a promise of later payment. Most states also provide a rescission window after funding.
Who Qualifies and What to Do Now
The general profile: insured around 65 or older, or younger with significant health conditions; death benefit of $100,000 or more; policy in force at least two years. Variable universal life clears these bars regularly, especially where a decade of poor subaccount results left the policy needing premiums the owner never planned for.
Get an actual read rather than guessing. Send the policy cover page for a free review or call (305) 209-7183. Background reading: what policies qualify and how cash surrender value works. For other Ohio National contracts, see selling an Ohio National universal life policy or an Ohio National indexed universal life policy.
Nothing on this page is tax, legal or investment advice. Settlement proceeds can affect means-tested benefits and have their own tax treatment — talk to your own advisor before deciding.
Frequently Asked Questions
My VUL lost value in the markets. Can it still be sold?
Often yes. A buyer is purchasing the death benefit, not the account value, so a depleted account balance mainly means the buyer has to fund more premium. That reduces the offer rather than ruling the policy out. A free review of the actual statement is the only way to know.
Does Ohio National have to approve the transfer?
No. The contract is your personal property and the buyer purchases it from you. The servicing company records the change of owner and beneficiary after closing but has no authority to block the sale.
What extra documents does a variable policy require?
Beyond the usual cover page, annual statement and in-force illustration, a VUL file may include the current prospectus or product supplement and subaccount performance reporting. Mention that the policy is variable when you call the service center so your request reaches the right unit.
Should I move my subaccounts to the fixed account first?
It is worth considering if the policy’s only remaining job is to stay in force. Removing equity volatility makes the account value more predictable, though returns will be lower. Discuss it with your own financial professional, since this page is not investment advice.
How much could a VUL settlement pay?
The GAO’s market study (GAO-10-775) found sellers typically received roughly 10% to 35% of face value, about 4 to 8 times cash surrender value on average. Your outcome depends on the insured’s age and health, the death benefit, required future premiums and any loan balance.
Is Ohio National still in business?
The company stopped selling annuities in 2018 and later converted from a mutual holding structure to a stock company under Constellation Insurance Holdings, in a deal announced in 2021 and completed the following year. In-force life policies continue to be administered. Confirm the current servicing entity and any rebranding with the phone number on your statement.
How long does the sale take?
Plan on roughly 60 to 120 days from first review to funded payment. Medical records, the in-force illustration and the ownership change take the most time. Funds should be held in independent escrow until the insurer confirms the transfer.
Find out what your policy is worth — free, confidential, no obligation.
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Related Reading
- Life Settlement Vs Surrender
- How It Works Policy Options
- What Policies Qualify For Life Settlement
- Cash Surrender Value Life Insurance
- Sell My Ohio National Universal Life Policy
- Sell My Ohio National 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.