Yes — a universal life policy can be sold in a life settlement when you and the policy qualify; the buyer purchases the contract from you, and the carrier’s permission is not required because the carrier is not a party to your decision. Universal life is, in fact, the policy type most often sold in the secondary market. But before you go further, confirm what you actually hold.
Venerable is best known for acquiring and administering legacy variable annuity blocks, including the variable annuity business it took on from Voya Financial. Annuities are not life insurance and cannot be sold in a life settlement. Because “variable annuity” and “variable universal life” sound nearly identical, households routinely mix them up. As of 2026, confirm with the carrier which product your contract is and which entity administers it — one phone call settles it.
If you do hold universal life, this guide explains why UL premiums balloon in the insured’s 70s and 80s, how to read an in-force illustration for your real lapse date, and what a settlement can realistically pay. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of Venerable or Voya. Education only — not legal, tax, or investment advice.
In This Article
Step Zero: Life Insurance or Annuity?
Take out the most recent statement and look for a face amount or death benefit with a named insured. That is life insurance. If instead you see a contract value, an accumulation value, a benefit base, an annuitant, or riders described as guaranteed lifetime withdrawal or income benefits, you are holding an annuity.
Annuities cannot be sold in a life settlement — there is no death benefit for a buyer to purchase, and the product is designed to pay out during life rather than after it. If that is what you have, your options are things like surrender, exchange, annuitization, or simply holding, each with its own tax consequences. Those are conversations for your own CPA or financial professional, not for a settlement firm.
If the paperwork is ambiguous, call the service number on the statement and ask: “Is this contract life insurance or an annuity, and what is the exact product name?” Ask for the answer in writing.
Why Universal Life Is the Most-Sold Policy Type
UL is a flexible-premium contract that works like an internal account. Premium goes in, interest is credited, and each month the insurer subtracts a cost-of-insurance (COI) charge plus expenses. The policy stays in force as long as the account covers those deductions. That flexibility is a genuine benefit at 45 and a genuine hazard at 78.
Two forces converge on older UL contracts:
- COI rises steeply with attained age. The monthly insurance charge on a 79-year-old is a multiple of what it was at 59, and it keeps climbing.
- Credited interest fell far below the original illustration. Policies sold in the 1980s, 1990s, and early 2000s were commonly illustrated at 8% to 12%. Many have spent years crediting at or near their contractual guaranteed minimum, often in the 2% to 4% range depending on the contract.
The result is the phone call service centers know well: the premium that worked for thirty years no longer keeps the policy alive, and the required amount is several times higher. That is arithmetic, not misconduct. It is also the moment when a settlement becomes worth pricing — because the alternative for many owners is lapsing a large policy for nothing at all.
The In-Force Illustration Is the Whole Ballgame
An in-force illustration is a projection the insurer runs on your actual contract. Request it in two versions:
- Current assumptions — today’s credited rate and current COI scale.
- Guaranteed assumptions — minimum credited interest and maximum COI charges the contract permits. This is the floor of the contract, and on many older UL policies it is sobering.
Then ask for three funding scenarios: keep paying your current premium; pay the minimum required to carry the policy to age 100; and stop paying entirely. That last scenario produces the number that decides your strategy — the year the account value reaches zero and the policy lapses.
Illustrations are free and you are entitled to request them. Allow two to four weeks, longer for legacy contracts. Our guide to what an in-force illustration is walks through the columns.
| Illustration Scenario to Request | What It Tells You | Why It Matters |
|---|---|---|
| Current assumptions, current premium | How long the policy lasts if nothing changes | Your baseline |
| Guaranteed assumptions, current premium | Worst case the contract allows | Reveals hidden lapse risk |
| Minimum premium to age 100 | True cost of keeping the coverage | The affordability test |
| Stop paying premiums | The year the account value hits zero | Your decision deadline |
| Reduced face amount | Lower ongoing insurance charge | A middle path if coverage is still wanted |
What Determines Your Offer
Buyers are not valuing your account balance. They are valuing a future death benefit minus every premium they expect to pay before collecting it. The inputs:
- Life expectancy, estimated by independent underwriters from medical records. Health conditions that shorten it raise the offer.
- Minimum premium to keep the policy in force. Lower is better. A UL with meaningful account value that can coast for a few years costs the buyer less.
- Face amount. Pine Lake works with death benefits of $100,000 and above; below that, transaction costs usually swallow the economics.
- Contract mechanics. Guaranteed COI ceilings, remaining surrender charges, and any outstanding loan, which is settled at closing and reduces your net.
The GAO’s study of the market (GAO-10-775) found sellers typically received about 10% to 35% of face value, averaging roughly 4 to 8 times cash surrender value. UL frequently sits high on that surrender multiple, since decades of COI deductions leave little to surrender for. See how much you can get.
Documents to Gather
You need one page to begin and a short file to finish. The cover page — insurer, policy number, face amount, issue date — is enough for a free review. Beyond that: your most recent annual statement (account value, cash surrender value, premiums paid, loan balance), the in-force illustration described above, and a HIPAA authorization so life-expectancy underwriters can review medical records. Make sure any medical release you sign is specific and revocable.
If you cannot locate the original contract, request a duplicate policy or policy summary from the servicing company. That is routine and usually free.
Process and Realistic Timing
Plan on 60 to 120 days from first contact to funded payment:
- Week 1 — free review from the cover page, with a straight yes-or-no on candidacy.
- Weeks 2–6 — in-force illustration, medical records, life-expectancy reports. This is the slow stretch.
- Weeks 6–10 — written offers. If a broker is involved, insist on both gross and net-of-commission figures.
- Weeks 10–16 — contracts, independent escrow funding, ownership and beneficiary change recorded by the insurer, payment released.
Never transfer ownership on a promise of later payment; your funds should be in escrow first. Most states provide a rescission window after funding — ask for your state’s rule in writing. Keep paying premiums until the sale actually closes.
Sell, Restructure, or Let It Go?
For an underfunded UL the real comparison is three-way. Lapsing pays nothing — you simply stop paying and the coverage disappears. Surrendering pays the cash surrender value, which on an old UL can be startlingly small. A settlement pays a lump sum and ends the premium obligation at closing.
There are middle options too. Many UL contracts allow reducing the face amount, which lowers the monthly insurance charge and can make the policy affordable again if you still want coverage. Some transactions permit a retained death benefit, leaving your heirs a portion of the face with no further premiums — see how the policy options work and is a life settlement worth it.
Settlement proceeds may be taxable and a lump sum can affect means-tested benefits such as Medicaid, so consult your own CPA or attorney before signing. To start, send the policy cover page for a free, no-obligation review, or call (305) 209-7183.
Frequently Asked Questions
How do I know whether I hold universal life or a variable annuity?
Look for a face amount or death benefit with a named insured — that is life insurance. Contract value, accumulation value, an annuitant, or an income rider indicates an annuity. If it is unclear, call the service number on your statement and ask for the exact product name in writing.
Can an annuity be sold in a life settlement?
No. Life settlements involve life insurance policies with a death benefit, which is what a buyer is purchasing. Annuities are designed to pay out during life and have no death benefit to sell. Their exit options carry separate tax consequences worth discussing with your own advisor.
Does the carrier have to approve the sale?
No. The policy is your property and the buyer purchases the contract from you. The carrier’s role is administrative — recording the change of owner and beneficiary once the transaction closes.
Why has my universal life premium increased so much?
The monthly cost of insurance rises steeply with the insured’s age, and many older policies illustrated at 8% to 12% credited interest have spent years crediting near their guaranteed minimum. The shortfall shows up in the insured’s late 70s and 80s as a much larger premium requirement. An in-force illustration shows exactly when the account value runs out.
How much can a universal life settlement pay?
The GAO’s market study (GAO-10-775) found sellers typically received about 10% to 35% of face value, averaging roughly 4 to 8 times cash surrender value. Universal life often lands high on that multiple because years of insurance charges leave little surrender value. Your figure depends on age, health, face amount, and required premiums.
Can I sell if I have an outstanding policy loan?
Yes. The loan balance plus accrued interest is paid off at closing and reduces your net proceeds. Get the current payoff figure from the insurer before evaluating offers so the closing math is clear.
Should I stop paying premiums while the sale is in progress?
No. Keep the policy in force until the transaction actually funds, because a lapse ends the deal. The buyer assumes premium payments only after the ownership change is recorded.
What do I need to send to get started?
The policy cover page — insurer, policy number, face amount, and issue date. That is enough for a free, no-obligation review and an honest answer about whether the policy is a candidate. Call (305) 209-7183 with questions.
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Related Reading
- What Is An In Force Illustration
- How Much Can I Get For My Life Insurance Policy
- How It Works Policy Options
- Is A Life Settlement Worth It
- Sell My Venerable Whole Life Policy
- Sell My Venerable Guaranteed 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.