Yes — a Principal term life policy can often be sold in a life settlement, but almost always only while its conversion privilege is still alive. Term insurance has no cash value: stop paying and you walk away with nothing. Converting to a permanent policy and selling it — usually in one coordinated transaction — is generally the only way to turn an unwanted term policy into money.
Principal owners have a wrinkle no other carrier page on this site shares in quite the same way: Principal exited retail U.S. life insurance sales in 2021. Its individual policies live on in a closed, serviced block — but conversion means converting into a permanent product, and what products a closed block makes available for conversion, and on what terms, is exactly the kind of detail you must verify in writing with the current administrator before assuming anything (as of 2026).
This guide shows you how to pin down your conversion rights and deadline, when a term settlement is realistic, and how to move fast without getting burned. Pine Lake Life Solutions is not affiliated with Principal.
In This Article
- No Cash Value Means One Exit: Convert, Then Sell
- Verify Your Conversion Rights with the Closed-Block Administrator
- When a Term Settlement Is Realistic — and When It Isn’t
- Expired Conversion Window? The Health-Impairment Exception
- Your Options with a Term Policy You No Longer Want
- How to Start — and the Red Flags to Refuse
- Other Principal Policy Types
- Frequently Asked Questions
No Cash Value Means One Exit: Convert, Then Sell
Permanent policy owners deciding to let go at least collect a surrender value. Term owners collect nothing — which is why enormous numbers of term policies are abandoned at precisely the ages when a settlement buyer would pay real money for them. The bridge between “worthless if dropped” and “sellable asset” is the conversion privilege: the contractual right to exchange your term policy for permanent coverage with no new medical underwriting, up to a stated deadline.
A settlement buyer uses that right. They evaluate the insured, model the permanent policy the contract converts into, and structure the purchase so the conversion and the ownership transfer close together. Without a live conversion right, buyers almost always pass — the main exception being an insured with a serious health impairment whose life expectancy falls within the remaining level-premium term period.
Verify Your Conversion Rights with the Closed-Block Administrator
Your conversion deadline is in the policy contract, in a provision usually titled “Conversion” or “Conversion Privilege” — commonly limited to the early portion of the level term period or to a stated age (often somewhere in the 65–70 range, but products vary; verify yours). For a Principal policy, add one closed-block step: confirm with the current administrator, in writing, three things:
- The exact conversion deadline for your policy number.
- Which permanent products are available for conversion now that the retail block is closed — and at what premium for the insured’s current age.
- Who currently services the policy — parts of Principal’s individual life business were reinsured, and the entity on your premium notice is where conversion paperwork goes (verify, 2026).
Get all of it in writing. A conversion right you cannot document is a conversion right a buyer cannot rely on, and the entire transaction hangs on it.
When a Term Settlement Is Realistic — and When It Isn’t
The strongest term-settlement candidates look like this: insured in their senior years (or younger with significant health conditions), face amount of $100,000 or more, and a conversion right with enough runway — remember the settlement process itself takes roughly 60 to 120 days. The market yardstick from the federal GAO study (GAO-10-775) is 10% to 35% of face value for settled policies generally; where a converted term policy lands depends on the insured’s profile and the premiums of the permanent product it converts into.
Buyers generally pass when the conversion window has closed and the insured is healthy, when the face amount is small, or when the insured is younger than the ages the market serves. If that is your situation, the honest answer is that the policy likely has no sale value, and your decision is simply whether the remaining term coverage is worth its premium. The full screen is at what policies qualify.
| Term Situation | Sellable? | Next Step |
|---|---|---|
| Convertible, deadline 2+ years out | Often yes | Confirm deadline in writing; request a free review |
| Convertible, deadline within 12–24 months | Often yes — urgent | Start now; the process itself takes 60–120 days |
| Conversion terms unclear (closed block) | Unknown until verified | Get deadline + available products in writing from the administrator |
| Conversion expired, insured healthy | Rarely | Decide if the remaining coverage is worth the premium |
| Conversion expired, serious health impairment | Sometimes | Request a review; ask about viatical treatment |
| Annual renewable term, premiums spiking | Depends on conversion rights | Verify conversion before the premium becomes unaffordable |
Expired Conversion Window? The Health-Impairment Exception
If the conversion deadline has passed, the settlement door is mostly closed — but not sealed. Buyers will consider non-convertible term when the insured has a serious health condition and meaningful remaining level-premium term, because they expect the death benefit to be paid while the coverage is still in force at predictable premiums.
If the insured is facing a terminal or chronic illness, ask about viatical settlement treatment as well — the tax rules differ from ordinary settlements, and the qualification thresholds are different too. This is a sensitive path, and it deserves an unhurried, written-offer, independent-escrow process like any other transaction. A free review costs nothing and gives a family a clear answer quickly; the Education Center covers the concepts in plain language.
Your Options with a Term Policy You No Longer Want
Ranked from keeping the most protection to the cleanest exit:
- Keep paying. Right when heirs still depend on the death benefit and the premium fits.
- Convert and keep. Lifetime coverage without a medical exam — costlier, but valuable if health has declined since issue.
- Reduce the face amount, if the contract allows, to cut the premium while keeping some coverage.
- Convert and sell (life settlement). The only monetizable exit for most term policies.
- Lapse. The default and the worst outcome if the policy still had market value.
Because term has no cash value, there is no surrender payment to weigh — the classic settlement-vs-surrender comparison reduces to sell it or lose it. That absence of a fallback is also why checking the deadline now matters more for term than for any other policy type; see how the policy options work for the mechanics.
How to Start — and the Red Flags to Refuse
Send the policy cover page — the first page showing the insurer, policy number, face amount, and issue date — plus the conversion deadline if you have confirmed it. Pine Lake reviews policies with $100,000 or more in death benefit free of charge; call (305) 209-7183 and mention the deadline so the timeline is built around it. The initial screen takes days, not weeks.
Deadline-driven sales attract pressure tactics, so hold the line on safeguards: offers in writing with gross and net-of-commission figures if a broker is involved; independent escrow before any ownership change; no signing blank or undated forms “to save time”; and a HIPAA release that is specific and revocable. Legitimate urgency is about your conversion date — never about skipping protections.
Other Principal Policy Types
If your household also holds permanent Principal coverage from the closed block, the analysis changes: permanent policies carry surrender value to compare against and no conversion deadline. Universal life is the most-settled type and especially exposed to rising charges in a closed block, whole life brings guaranteed cash value into the equation, and GUL’s locked premiums draw strong buyer interest. See our guides to selling a Principal universal life policy, a Principal whole life policy, or a Principal GUL policy.
Frequently Asked Questions
Can I sell my Principal term policy even though Principal left the life insurance business?
Often yes. Principal’s 2021 exit closed the block to new sales but did not cancel existing policies or their contractual conversion rights. The key is verifying your conversion deadline and the products available for conversion with the current administrator — then a convert-and-sell settlement works like any other carrier’s.
Why does a term policy need to be convertible to sell?
Term has no cash value and eventually expires, so buyers need the conversion right to exchange it for permanent coverage they can hold until the death benefit pays. Without that right, the policy has no reliable value to a buyer — unless the insured’s health shortens life expectancy into the remaining term period.
How do I find my conversion deadline?
Read the conversion provision in your policy contract, then confirm it in writing with the administrator named on your premium notice. Deadlines are commonly tied to a set age or the early part of the level term period, and closed-block servicing makes written confirmation especially important.
What can I convert into now that Principal’s retail block is closed?
That is exactly what to ask the current administrator in writing: which permanent products are available for conversion and at what premium for the insured’s age. Conversion rights are contractual and survive the block closure, but the available product menu is a servicing detail you must verify.
My deadline is under a year away. Is there still time?
Usually, but start immediately. The settlement process runs roughly 60 to 120 days and the conversion must be coordinated before the deadline. Waiting until the final weeks puts the transaction — and the policy’s entire value — at risk.
How much do term settlements pay?
There is no published term-only average, but the general market range from the federal GAO study (GAO-10-775) is 10% to 35% of face value. The insured’s age and health and the converted policy’s premium schedule drive where an offer lands. A free review gives you a realistic read before you commit to converting.
What do I send to get started?
The policy cover page — insurer, policy number, face amount, issue date — plus your confirmed conversion deadline if you have it. Pine Lake reviews policies of $100,000 or more in death benefit at no cost and no obligation.
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
- Life Settlement Vs Surrender
- What Policies Qualify For Life Settlement
- How It Works Policy Options
- Education Center
- Sell My Principal Whole Life Policy
- Sell My Principal Universal Life 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.