Yes, with one condition. A term life policy from Security Mutual Life Insurance Company of New York can be sold in a life settlement, but almost always only after the conversion privilege has been used to turn it into permanent coverage. The carrier does not have to approve the sale itself; policy ownership has been treated as transferable property since Grigsby v. Russell in 1911.
The condition exists because of what term is. There is no cash value, and the coverage expires at the end of the level period. A buyer who purchases pure term is buying something that may evaporate on a known date, so most will not. Convert it, and the same death benefit becomes permanent and sellable.
Everything therefore hinges on your conversion window, and that window closes on a date already written into your contract. This page explains how to find it, what happens when it closes, what a converted policy is worth, and when it is smarter to let the term policy go. Pine Lake Life Solutions is not affiliated with Security Mutual Life Insurance Company of New York.
In This Article
- Where Your Policy Is Serviced, and Why It Matters Here
- Finding Your Conversion Deadline
- Why the Deadline Is the Urgent Part
- What You Convert Into Changes the Offer
- Documents and the Order of Operations
- A Hypothetical Convertible Term Case
- When You Should Not Sell
- Taxes, State Rules, and How to Start
- Frequently Asked Questions
Where Your Policy Is Serviced, and Why It Matters Here
Security Mutual Life Insurance Company of New York is based in Binghamton, New York, and traces its origins to the 1880s. It has operated as a mutual company owned by policyholders rather than shareholders, which is why owners generally do not run into the confusion common at carriers whose blocks were sold or spun off. Verify the company’s present corporate status, whether it still issues new individual policies in 2026, and its current A.M. Best rating before relying on any of it.
For a term policy this matters for one practical reason: conversion is a carrier transaction. The service center is the office that will confirm your remaining conversion right, quote the permanent premium, and issue the new contract. Use the number on your most recent premium notice, and get the answers in writing with a date on them.
Finding Your Conversion Deadline
Conversion provisions are written with two kinds of limits, and whichever arrives first governs. An age limit ends the right when the insured reaches a stated age, often somewhere in the 65 to 70 range. A duration limit ends it after a set number of policy years, such as the first ten years of a twenty-year term. Some contracts also limit which permanent products you may convert into.
Read the conversion section of your own contract rather than assuming, and then confirm it with the carrier. If the policy was sold as convertible but you cannot find the provision, request a written conversion status letter stating the deadline and the products available. That letter is worth having regardless of whether you sell, because it tells you exactly how much time you have to make any decision at all.
Why the Deadline Is the Urgent Part
Conversion does not require new medical underwriting. That is the entire value of it. Someone whose health has declined since the policy was issued cannot buy new permanent coverage at a workable price, but can convert on the strength of underwriting done years ago. A shortened life expectancy is also, bluntly, what makes a policy valuable in the secondary market.
So the same health change that makes the policy worth selling is the change that makes conversion irreplaceable. When the window closes, both doors close together: no permanent coverage, and no sale. Term policies quietly expire every year that could have been worth real money three months earlier. If your window ends within the next twelve months, treat this as time-sensitive.
What You Convert Into Changes the Offer
Conversion typically produces a whole life or universal life contract from the same carrier, at your attained age, with no medical questions. The premium will be much higher than the term premium, because permanent coverage at an advanced age costs more. That premium is exactly what a buyer will have to pay for years, so the cheaper and more predictable the converted product, the stronger the offer.
Ask the service center to quote every conversion product you are eligible for, with annual premiums, rather than accepting the first option offered. A guaranteed universal life style contract with a level premium is usually easier for a buyer to price than a policy whose costs float. Also ask whether partial conversion is allowed, since converting only part of the face amount can reduce the premium burden.
| Conversion window status | Realistic options | Urgency |
|---|---|---|
| More than 5 years remaining | Convert and sell, or keep the term coverage | Low; review annually |
| 1 to 5 years remaining | Get a conversion quote now and evaluate | Moderate |
| Under 12 months remaining | Request conversion quote and policy review immediately | High |
| Window already closed | Confirm in writing; a sale is unlikely | Confirm, then plan around the expiry date |
| Non-convertible term | Generally not sellable | Check the contract before concluding |
| Level period ending within a year | Compare renewal premium against conversion | High; renewal rates rise sharply |
Documents and the Order of Operations
Gather the policy cover page or annual statement, the conversion provision pages, and a written conversion quote showing premiums for each available product. You will also sign a HIPAA authorization so medical records can be reviewed and a life expectancy estimate produced, which is what turns a file into an offer.
The usual sequence is: policy review first, life expectancy analysis next, offers after that, then conversion completed with the carrier, then closing through a change of ownership. Converting first is sometimes necessary if the deadline is imminent, but be aware that once converted, the higher permanent premium becomes yours until the sale closes. Discuss the sequencing before you file conversion paperwork.
A Hypothetical Convertible Term Case
Illustration only. A 68-year-old holds a $500,000 twenty-year level term policy with two years of conversion right left and a current term premium of $4,200 a year. Health has changed since issue. The carrier quotes a converted permanent premium of roughly $26,000 a year at attained age.
The buyer’s math is straightforward: a $500,000 death benefit, a $26,000 annual carrying cost, and a life expectancy estimate that determines how many years of premiums are likely. Across the market, settlement proceeds broadly range from about 10% to 35% of face value, and term cases tend to sit lower in that range because of the carrying cost. Against the alternative, which for pure term is usually nothing at all, even a modest offer can be meaningful.
When You Should Not Sell
Keep the term policy if the death benefit is still needed and the premium is affordable. Term is cheap; a surviving spouse with an income gap or a mortgage that outlives the insured is a real reason to keep paying. Selling permanently removes that protection from your family.
Also pause if the insured is terminally or chronically ill. Many term contracts include an accelerated death benefit rider that pays a portion of the face amount directly from the carrier, typically much faster than the 60 to 120 days a settlement takes and with far less paperwork. And if the face amount is under $100,000, or the insured is in good health and under 65, the case may simply not attract offers. Letting a term policy expire costs you nothing but the coverage.
Taxes, State Rules, and How to Start
Settlement proceeds are generally taxed in layers tied to your cost basis, and the 2017 federal tax law changed part of how basis is figured. Term policies usually carry little basis, so a larger share of the proceeds may fall into the taxable layers. That is a description of the rules, not tax advice; take the offer to a CPA before signing. New York regulates life settlements under its own statute with specific licensing and disclosure requirements, so New York residents should expect more disclosure paperwork.
If you want a straight answer on whether a Security Mutual term policy is worth pursuing, the fastest step is to send the policy cover page for a free policy review, or call (305) 209-7183. Bring the conversion deadline if you know it, because that one date determines whether this is urgent or not.
Frequently Asked Questions
Can I sell term life insurance without converting it?
Rarely. Pure term has no cash value and expires on a known date, so most buyers require conversion to permanent coverage first. Ask your carrier for a written statement of your conversion rights before concluding anything.
Will conversion require a medical exam?
Normally no. That is the point of the conversion privilege: it lets you exchange term for permanent coverage based on the underwriting done when the policy was issued, regardless of your health today.
How much higher will the converted premium be?
Substantially higher, because permanent coverage is priced at your attained age. Ask the service center to quote every product you are eligible to convert into so you can compare, since the carrying cost directly affects any offer.
Who pays the converted premium while the sale is pending?
You do, until closing. That is why sequencing matters. Discuss whether to convert before or alongside the sale, unless your deadline forces the issue.
Does Security Mutual have to approve the sale?
No. The carrier handles the conversion and then records the change of ownership after closing. It has no authority over your decision to sell the policy.
How long does the full process take?
Typically 60 to 120 days, and often nearer the longer end for term cases because carrier conversion processing happens in the middle of the transaction.
What if my level term period is about to end?
Compare the annual renewal premium to the conversion premium before doing anything. Renewal rates after a level period usually rise steeply each year, which can make the conversion route look better than it first appears.
Is Pine Lake connected to Security Mutual?
No. Pine Lake Life Solutions is independent of Security Mutual Life Insurance Company of New York. Questions about your specific contract should go to the carrier’s service center.
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Related Reading
- What Policies Qualify For Life Settlement
- How It Works Policy Options
- Life Settlement Vs Surrender
- What Is A Life Settlement Broker
- Education Center
- Sell My Security Mutual Whole 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.