Yes — a RiverSource term life policy can be sold in a life settlement, without the insurer’s permission, as long as the policy is still convertible to permanent coverage. The buyer purchases your contract; the carrier simply records the ownership change at the end. The conversion requirement is not a RiverSource rule — it applies to term insurance generally, because term has no cash value and is built to expire before the death benefit is ever paid.
That single fact makes term the most deadline-driven policy type in the secondary market. Conversion rights end on a date fixed by the contract: a stated attained age, a number of policy years, or the close of the level-premium period. Once that date passes, the privilege is gone permanently, and with it the practical ability to sell. People lose real money to a calendar every year without ever knowing there was a decision to make.
Your RiverSource term policy may have been issued as an IDS Life contract; Ameriprise Financial was spun off from American Express in 2005 and its insurance subsidiary took the RiverSource name in 2006. This guide shows how to find your conversion deadline, what conversion does and does not cost you, and how the separate 31-day clock on employer group coverage works. Pine Lake Life Solutions is not affiliated with RiverSource or Ameriprise Financial.
In This Article
Step One: Pin Down Your Conversion Deadline
Open the contract and look for a provision headed “Conversion Privilege” or “Right to Convert.” It will state the last date or attained age at which you may convert, which permanent products the policy converts into, and whether medical underwriting applies. In a genuine conversion privilege it does not — you convert at your original risk class no matter what your health looks like now, which is the entire value of the feature.
If the contract is missing or the language is ambiguous, call the RiverSource policy service center and ask for the answer in writing: is this policy convertible, until exactly what date, and to which products currently offered in 2026? The product menu available for conversion can be narrower today than when the policy was sold, so ask about what is actually available rather than what the contract permits in theory.
Why a Buyer Cannot Use Term As-Is
Settlement buyers acquire a death benefit that will eventually be paid and price it against the premiums required to get there. Term insurance is engineered to end first. A 20-year level term policy issued at 58 runs out at 78; after the level period, annually renewable premiums escalate so steeply that continuing is almost never rational.
Convert that same policy to a permanent form and it becomes a fundable, lasting obligation of the insurer — something a buyer can model. That is why virtually every term inquiry becomes a conversion inquiry. If the policy is not convertible, or the window has closed, the honest answer is usually that there is no secondary-market value, and it is better to hear that in five minutes than after weeks of paperwork.
What Conversion Costs, and Who Bears It
Carriers generally do not charge a fee to exercise a conversion privilege. The cost is the converted policy’s premium, which reflects the insured’s attained age and is much higher than the term premium. That sticker shock is why many owners assume conversion is impossible for them.
Inside a settlement, conversion is normally coordinated as part of the transaction rather than left as a bill you must fund alone. How that is arranged varies by buyer and by carrier rules, and it should be documented plainly before you sign anything. Ask two direct questions and insist on written answers: who pays the converted policy’s premium, and at what point does ownership transfer relative to the conversion? Ambiguity on either point is a reason to slow down.
| Question | Where the Answer Lives | Why It Is Urgent |
|---|---|---|
| Is the policy convertible? | Conversion Privilege provision | Without it, there is usually no sale |
| What is the conversion deadline? | Contract, confirmed by service center | The privilege never reopens once it ends |
| What can it convert into? | Service center, in writing | Available products may be narrower in 2026 |
| Is underwriting required? | Contract language | Usually no; that is the point of the privilege |
| When does the level period end? | Policy specifications page | Renewal premiums escalate steeply after |
| Is the coverage a group certificate? | Benefits booklet | Typically about 31 days to convert after leaving |
Employer and Group Coverage Runs on a 31-Day Clock
Term coverage obtained through an employer, union, or association is usually a certificate under a group contract rather than an individual policy, and its conversion right is far shorter. The common rule is conversion to an individual policy within about 31 days after coverage ends — retirement, termination, or a reduction in hours. After that, the coverage simply ceases.
Retirement is when this bites hardest, because a retiring employee often carries substantial group life coverage and receives the conversion notice buried among benefit-election forms. If you or a parent is leaving a job with meaningful group life insurance, read the conversion rules that week. Converted coverage can later be evaluated for a settlement; coverage that quietly ended cannot.
Documents Worth Gathering
A free review of a term policy needs two pages: the cover page (insurer, policy number, face amount, issue date) and, if you can find it, the conversion provision. Together they answer most of the question immediately.
Beyond that, useful items are the current premium notice, written confirmation of the conversion deadline and available products, and — once converted — an in-force illustration on the permanent policy. A HIPAA authorization comes later so life-expectancy underwriters may review medical records; make sure it is specific and revocable. Term has no cash value at all, so there is no surrender figure in the comparison; see why cash surrender value exists for the contrast with permanent coverage.
From Conversion to Closing
Once the policy is permanent, it transfers like any other contract. The buyer prepares the insurer’s absolute assignment naming a new owner and beneficiary; you sign as owner; the carrier reviews, records, and confirms in writing. Notarization or a signature guarantee is commonly required, and the insurer verifies the policy is in force and not in a grace period.
Money sits in independent escrow and releases only after that written confirmation. Most states then provide a rescission window during which the seller may unwind the transaction. Plan on 60 to 120 days for the settlement plus additional time for the conversion — one more reason a shrinking conversion window is a problem. The full sequence is in how the policy options work.
Worked Example and Who Qualifies
Hypothetical, rounded, for illustration only. A 71-year-old holds a $400,000 level term policy with three years left in the level period and a conversion privilege that ends at attained age 72 — roughly eleven months away. Ignoring it means the coverage lapses in three years for nothing. Converting makes it permanent; a settlement in the published 10%–35%-of-face range would sit between $40,000 and $140,000, subject to underwriting and the converted policy’s premium. The figures are invented; the eleven-month deadline is the part that matters.
Term policies that tend to work: convertible, window open, insured roughly 65 or older, face amount of $100,000 or more. Ones that do not: non-convertible, expired window, or a small death benefit. Review the general screen in what policies qualify, compare exits in settlement versus surrender, or read more in the education center. To have a policy looked at, send the cover page or call (305) 209-7183.
Frequently Asked Questions
Can a term policy really be sold?
Yes, when it is convertible to permanent coverage and the conversion window is still open. Term has no cash value and expires on a fixed date, so buyers depend on the conversion privilege to create a lasting death benefit. Non-convertible term generally has no secondary-market value.
How do I find my conversion deadline?
Look for the Conversion Privilege or Right to Convert provision in the contract, which names the last age or date. If the contract is unavailable, ask the RiverSource policy service center for written confirmation of the deadline and the conversion products currently available.
Will I need a medical exam to convert?
Typically not. A conversion privilege lets you move to permanent coverage at your original risk classification without evidence of insurability. Terms vary by contract, so confirm with the servicing carrier before relying on it.
Who pays the higher premium on the converted policy?
Conversion itself usually carries no fee, but the permanent policy costs more per year. In a settlement, conversion is generally coordinated as part of the transaction. Get in writing who funds the premium and when ownership transfers relative to the conversion.
My coverage is through my employer. Does the same apply?
The right exists but the deadline is much shorter — commonly about 31 days after coverage ends. Retirement or a job change starts that clock immediately, and the notice is easy to miss among other benefits paperwork. Check the conversion rules the same week coverage ends.
My policy says IDS Life rather than RiverSource. Is it still valid?
Yes. IDS Life Insurance Company was renamed RiverSource Life Insurance Company in 2006 after Ameriprise Financial’s 2005 spinoff from American Express. Contract terms carried over. Use the number on your latest premium notice to confirm the servicing company.
How long does everything take?
A settlement generally runs 60 to 120 days, and conversion adds time on top of that. If your conversion window closes within a year, treat it as urgent — the paperwork cannot be compressed into the final weeks.
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Related Reading
- What Policies Qualify For Life Settlement
- Cash Surrender Value Life Insurance
- How It Works Policy Options
- Life Settlement Vs Surrender
- 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.