Yes — a Security Mutual indexed universal life policy can be sold in a life settlement if the insured and the contract qualify, and you do not need the company’s permission to transfer ownership. The contract is an asset you own. The insurer records the new owner after closing. What decides whether a sale is realistic is the insured’s age and health, the size of the death benefit, any outstanding loan, and how expensive the policy has become to maintain.
Security Mutual Life Insurance Company of New York, headquartered in Binghamton and founded in 1886, is a mutual life insurer domiciled in New York State. That domicile is not a trivia point: New York regulates in-force policy changes more tightly than most states, and the New York Department of Financial Services adopted Insurance Regulation 210, which governs how insurers may set and change non-guaranteed elements such as cost-of-insurance rates and index crediting parameters on in-force life policies. As of 2026, confirm with Security Mutual which product you hold and whether an indexed universal life series is open for new sales or exists as an in-force block.
Below: how index crediting works, what New York’s rules do and do not protect, and how a settlement buyer prices a universal life contract. Pine Lake Life Solutions is not affiliated with Security Mutual Life, and this page is educational only — not legal, tax or investment advice.
In This Article
- New York’s Regulation 210 and What It Means for Your Policy
- How Index Crediting Works Inside the Contract
- Cost of Insurance: The Engine of Most Lapses
- Order the In-Force Illustration Before Deciding Anything
- How the Secondary Market Prices an IUL
- Alternatives to Weigh First
- Qualifying, Timeline and How to Start
- Frequently Asked Questions
New York’s Regulation 210 and What It Means for Your Policy
New York’s Insurance Regulation 210 sets standards for how insurers determine and change non-guaranteed elements — cost-of-insurance scales, expense charges, and the crediting parameters on indexed products — on in-force life insurance. Broadly, it requires that changes be based on future expectations rather than an attempt to recoup past losses, that they be applied on a reasonable class basis, and that policyholders receive advance notice.
What the regulation does not do is guarantee that your cap will never fall or your COI will never rise. It disciplines the process, not the direction. So the practical advice is unchanged: ask Security Mutual, in writing, for the currently declared cap and participation rate, the guaranteed minimums, the current COI scale and the guaranteed maximum. Confirm the current state of the rule as of 2026, since insurance regulations are amended over time.
How Index Crediting Works Inside the Contract
Your account value is not invested in the stock market. The insurer credits interest based on the movement of an index — typically the S&P 500 measured on price return, so dividends are not included — over a defined segment. The measured change is multiplied by a participation rate and then limited by a cap, with a floor of usually 0% preventing a negative credit.
The trade is explicit: you give up the top of a strong year and the dividend component in exchange for protection in a bad year. What people miss is that a 0% year is not a break-even year. Cost of insurance, the monthly policy fee and per-thousand charges are deducted regardless, so the account value declines. String several of those together on an insured in their seventies and the policy’s projected lifespan shortens sharply.
Cost of Insurance: The Engine of Most Lapses
COI is charged on the net amount at risk — death benefit minus account value — using a rate that rises with attained age. Two forces compound. First, mortality rates climb every year. Second, when credits underperform, the account value shrinks and the amount at risk grows, so the same rate produces a bigger dollar charge.
That is why an indexed universal life policy that looked stable at 68 can be in trouble at 80. It is also why the premium quoted at issue is often no longer the premium required. Read our explainer on cost of insurance, then compare the current and guaranteed maximum scales for your own contract.
| Element | Set at Issue | Changeable In Force | Notice Required? |
|---|---|---|---|
| Guaranteed minimum floor | Yes | No | N/A |
| Declared index cap | Current value only | Yes, to the guaranteed minimum | Generally yes in New York |
| Participation rate | Current value only | Yes | Generally yes in New York |
| Cost of insurance scale | Current value only | Yes, to the guaranteed maximum | Generally yes in New York |
| Face amount | Yes | Only if you request a reduction | N/A |
Order the In-Force Illustration Before Deciding Anything
Ask the carrier for an in-force illustration under four scenarios: current charges and crediting at your current premium; guaranteed maximum charges and minimum crediting at your current premium; the premium that sustains the policy to maturity; and no further premium at all. It costs nothing and is the only document that tells you the truth about the contract’s runway.
Compare the projected lapse year across the scenarios. If the guaranteed column collapses in a handful of years, your policy’s survival depends on carrier decisions, not contract guarantees. A settlement buyer reads the same pages to build its premium schedule. More at why the in-force illustration matters.
How the Secondary Market Prices an IUL
Valuation subtracts. Start with the net death benefit — face amount less loans and accrued interest. Subtract the present value of the premiums required to keep the policy in force to maturity, taken from the in-force illustration. Weight by an independent life-expectancy estimate derived from medical records. Discount at the buyer’s required rate of return. Subtract closing costs. What remains is the offer.
Because different buyers use different mortality tables and different hurdle rates, offers on the same policy can vary widely — which is why comparing more than one bid matters. Federal research (GAO-10-775) found typical proceeds of roughly 10% to 35% of face value, commonly four to eight times cash surrender value. See how to compare two offers.
Alternatives to Weigh First
If the death benefit still has a job to do and the corrected premium is payable, keep the policy — the death benefit paid to a beneficiary is generally received income-tax-free, an advantage no sale reproduces. If you want relief without giving up coverage, ask whether reducing the specified amount stabilizes the contract. If the contract offers a reduced paid-up option, that ends premiums while keeping a smaller benefit.
Surrender pays the cash surrender value only. Lapse pays nothing. A settlement fits when coverage has outlived its purpose and the money is needed now — often for home care, assisted living or a Medicaid spend-down. Start with surrender versus sale.
Qualifying, Timeline and How to Start
The realistic profile: insured age 65 or older, or younger with meaningful impairments; death benefit of $100,000 or more; policy past the contestability period; and premiums that leave room in the economics. New York residents should also know that the state regulates life settlement transactions and licenses providers and brokers — ask any counterparty for its New York licensing status and verify it with the Department of Financial Services as of 2026.
Expect 60 to 120 days from application to funding, with an independent escrow agent holding the money until the ownership change is confirmed, and a rescission window afterward whose length depends on your state.
To find out where you stand, send only the policy cover page for a free, no-obligation review, or call (305) 209-7183.
Frequently Asked Questions
Does Security Mutual have to consent to a life settlement?
No. Transferring ownership of a policy you own does not require the insurer’s approval. Security Mutual records the change of owner and beneficiary once the closing documents are submitted after funding.
What does New York Regulation 210 do for me?
It sets standards for how New York-domiciled insurers determine and change non-guaranteed elements such as cost-of-insurance rates and indexed crediting parameters on in-force policies, including class-based treatment and advance notice. It disciplines the process but does not guarantee your cap will never fall. Confirm the current version of the rule as of 2026.
Does Security Mutual sell indexed universal life today?
Security Mutual Life, founded in Binghamton in 1886, is a New York mutual insurer whose shelf has included whole life, term and universal life products. Confirm with the company as of 2026 whether an indexed universal life series is currently offered or whether your contract belongs to an in-force block.
Are life settlements regulated in New York?
New York regulates life settlement transactions and licenses the providers and brokers who participate. Ask any counterparty for its licensing status and verify it directly with the New York Department of Financial Services before signing anything, as of 2026.
How much could I receive for the policy?
The federal GAO study found typical proceeds of about 10% to 35% of face value, commonly four to eight times cash surrender value. Your result depends on life expectancy, the premium needed to sustain the policy, and any loan balance. Only a review of your actual numbers can narrow that range.
Should I get more than one offer?
Yes, when the policy attracts multiple bidders. Buyers use different mortality assumptions and different required returns, so the same contract can draw materially different bids. Ask for every offer in writing and for any intermediary’s compensation to be disclosed.
What is the first step?
Send only the policy cover page, which shows the insurer, policy number, face amount and issue date. It is enough for a free, no-obligation eligibility review, and the answer usually comes back within a day or two. You can also call (305) 209-7183.
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 Is Indexed Universal Life
- What Is Cost Of Insurance
- In Force Illustration Why It Matters
- How To Compare Two Life Settlement Offers
- Nursing Home Medicaid Spend Down
- Surrender Vs Sell Policy
- Are Life Settlement Companies Regulated
- What Is Life Settlement Provider Licensing
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.