Yes — a William Penn Life of New York variable universal life policy can be sold in a life settlement if you and the policy qualify; the buyer purchases the contract from you and the insurer’s permission is not required. VUL brings one complication no other policy type has: your cash value lives in market subaccounts, so the figure on your statement is a moving target rather than a fixed number.
That trips people up. An owner requests a surrender quote, sits with the decision for a quarter, and finds the number has moved — sometimes a lot. Meanwhile the charges inside the policy have kept grinding away regardless of what the markets did. The most useful thing to understand about selling a VUL is that the number moving around on your statement is not the number a buyer is looking at.
William Penn Life Insurance Company of New York is the New York arm of the Legal & General America group, sibling to Banner Life, and exists as a separate company because New York licenses insurers under its own regime. New York also governs settlements under its own statute, Article 78, which we cover below. Pine Lake Life Solutions is not affiliated with, endorsed by, or acting on behalf of William Penn Life Insurance Company of New York or Legal & General America.
In This Article
- What a VUL Actually Is
- M&E, Cost of Insurance, and the Downward Spiral
- The Number Buyers Look At (It Is Not Your Balance)
- New York’s Article 78 Framework
- Your Surrender Value Is a Snapshot
- Illustrations: Ask for the 0% Run
- Documents, Loans, and Trust Ownership
- Timing, Protections, and Whether to Sell at All
- Frequently Asked Questions
What a VUL Actually Is
A variable universal life policy combines a death benefit with an investment account you direct. Premiums, after loads and charges, go into separate-account subaccounts that behave much like mutual funds — equity, bond, balanced, and usually a fixed option. You pick the mix; the insurer guarantees nothing about the return.
Because it is a securities product, VUL is sold with a prospectus and by registered representatives, and your statements report unit values and subaccount performance rather than a single credited interest rate.
The appeal is genuine. A well-funded VUL in a favorable market stretch can build serious value inside a tax-advantaged wrapper. The risk is equally genuine. When markets fall, the account value falls with them, and the policy’s internal charges keep coming out of a smaller base — which is how VUL policies get into trouble faster than owners anticipate.
M&E, Cost of Insurance, and the Downward Spiral
Three layers of charges work against your balance every month.
Mortality and expense risk charges (M&E) are assessed against separate-account assets to compensate the insurer for risk and expenses. They are deducted continuously, in every market.
Cost of insurance (COI) pays for the pure death benefit protection and rises every year as the insured ages. In the 70s and 80s the increase accelerates sharply.
Administrative charges, rider charges, and premium loads take their cut on top.
Now the spiral. On an underfunded VUL, the account value is modest, COI is climbing hard, and a market decline shrinks the base the charges come from. Each month the policy liquidates more units to pay the same charges, leaving fewer units to participate in any recovery. It compounds against you. This is why VUL policies lapse even when the owner faithfully paid the originally planned premium for thirty years. Pull your annual statement and find the total charges deducted line — most owners have never looked at it.
The Number Buyers Look At (It Is Not Your Balance)
Here is the shift that makes VUL settlements make sense. A buyer is not purchasing your investment account. Once the policy transfers, a buyer typically simplifies the strategy toward one goal: keep the death benefit in force at the lowest possible cost. That usually means reallocating conservatively and funding the policy with the minimum premium required to prevent a lapse.
So the valuation inputs are the death benefit, the insured’s estimated life expectancy from medical records, and the projected annual premium needed to carry the policy. The subaccount balance matters only in so far as it reduces what the buyer must contribute in the early years.
The practical implication runs against intuition: a VUL bruised by a poor market stretch is not necessarily worth less to a buyer, because the death benefit has not changed. A policy that looks like a disappointment on a statement can still be a viable sale. See what determines a policy’s value for how the inputs interact.
New York’s Article 78 Framework
Settlements involving New York policies fall under New York Insurance Law Article 78, overseen by the New York State Department of Financial Services. New York wrote its own rules rather than adopting the model acts used elsewhere.
For a seller, the two things that matter most are disclosure and rescission: New York transactions carry defined disclosure obligations, and there is a rescission period after funding during which a seller may unwind the sale by returning the proceeds. Ask in writing, before signing, what disclosures you are entitled to and exactly how long your rescission window runs.
Because VUL is a securities product, there may be additional disclosure steps depending on who is advising you. Ask any professional involved how they are compensated and get the figures in dollars, not only percentages. Verify licensing claims with the regulator directly rather than trusting a website. Pine Lake publishes education only; nothing here is an offer to purchase a policy, and nothing here is legal, tax, or investment advice.
| VUL Feature | Effect on You as Owner | Effect on a Settlement Offer |
|---|---|---|
| Subaccount market exposure | Balance rises and falls; no guaranteed floor | Minimal – death benefit is unchanged |
| M&E charges | Deducted continuously from separate-account assets | Raises the buyer’s cost of carry |
| Rising cost of insurance | Accelerates sharply at older ages | Raises the buyer’s cost of carry |
| Surrender charge schedule | Can reduce an early surrender substantially | Lowers your alternative, not the offer |
| Death benefit | Fixed unless you change it | The primary asset being purchased |
| Insured’s current health | No effect on your policy terms | Major driver through life expectancy |
Your Surrender Value Is a Snapshot
With whole life you can look up a guaranteed cash value in a printed table. With VUL you cannot. Surrender value equals the current account value minus any surrender charge still in effect — and the account value changes daily.
Two practical consequences. First, date-stamp any surrender quote and re-pull it before making a final decision; a quote from six weeks ago may not be what you would actually receive. Second, check whether a surrender charge still applies. These charges typically grade down over an initial schedule of years, and inside that window the charge can eat a meaningful share of the balance.
Our cash surrender value guide covers the mechanics, and the settlement vs. surrender comparison shows how to line the two options up fairly using net figures on both sides.
Illustrations: Ask for the 0% Run
For a variable policy, a single illustration tells you little, because returns are not guaranteed. Ask the company to run the in-force illustration at multiple assumed rates of return — standard practice for variable products — and specifically request a run at 0% net return.
The 0% run is the honest one. It shows how long the policy survives on charges alone if the markets contribute nothing, and it is the closest thing a VUL has to a guaranteed-assumptions scenario. Find the year the account value reaches zero; that is your realistic lapse horizon in a flat market.
Also request the minimum premium required to keep the policy in force to a target age under a conservative assumption. That figure is the buyer’s cost of carry and is the single number most likely to move an offer. Our page on in-force illustrations explains what to look for. As of 2026, confirm the current servicing entity and address with the company first — Legal & General agreed to sell its U.S. insurance business to Meiji Yasuda, and the address on an older contract may be out of date.
Documents, Loans, and Trust Ownership
For a free screening, one page: the policy cover page showing insurer, policy number, face amount, and issue date.
To go further, assemble the most recent annual statement (subaccount allocation, total charges deducted, surrender charge status, loan balance), the multi-scenario in-force illustrations including the 0% run, and a HIPAA authorization for medical records. Read the authorization; it should be specific about recipients and revocable.
Two items to surface early. Policy loans are common on VUL, and the balance is paid off at closing, reducing your net proceeds dollar for dollar — it does not block a sale but it changes the arithmetic. And trust ownership, frequent on New York estate-planning policies, requires the trustee’s signature and sometimes a review of the trust’s authority to sell. Both are far easier to handle on day one than during closing.
Timing, Protections, and Whether to Sell at All
Plan on 60 to 120 days from first contact to funded payment. Medical records are the usual bottleneck; authorize them the first week. Illustration requests on variable products can also run longer because of the multiple scenarios.
Insist on written offers with gross and net figures and commissions disclosed, independent escrow that releases only after the carrier confirms the ownership and beneficiary change, and a clear statement of your rescission window. Never sign a policy over against a promise of later payment. Keep premiums current throughout — a market drop can pull a lapse date forward faster than a transaction closes.
On the underlying question: keep the policy if the death benefit still serves a real purpose, the funding is adequate, and the premium is comfortable. Consider selling if the original reason has passed, the annual charges have outrun what you are willing to fund, or you need cash now for care rather than a death benefit later. Qualification generally means an insured around 65 or older, a face amount of $100,000 or more, and a policy past contestability. The federal GAO study (GAO-10-775) put typical seller proceeds at roughly 10% to 35% of face value and about 4 to 8 times surrender value — ranges, not quotes.
Work it through with is a life settlement worth it and what policies qualify. If you hold other William Penn coverage, see our guides to selling a William Penn universal life policy or a William Penn GUL policy. For a free, no-obligation review, send the policy cover page or call (305) 209-7183. This page is educational and is not legal, tax, or investment advice.
Frequently Asked Questions
Can I sell a VUL whose account value has fallen?
Yes, and it may be worth more than you assume. Buyers price the death benefit, the insured’s life expectancy, and the premium needed to keep the policy in force — not the subaccount balance. A market decline lowers your surrender value but leaves the death benefit a buyer is purchasing unchanged.
Does William Penn have to approve the sale?
No. The policy is your personal property and may be transferred; the company simply records the new owner and beneficiary once the transaction closes. Pine Lake is not affiliated with, endorsed by, or acting on behalf of William Penn Life Insurance Company of New York or Legal & General America.
What are M&E charges and why do they matter here?
Mortality and expense risk charges are deducted against separate-account assets to compensate the insurer for risk and expenses, and they come out in every market. Combined with a cost of insurance that rises annually, they are the main reason an underfunded VUL can lapse even when premiums were paid exactly as originally planned.
Why does my surrender value keep changing?
It equals your current subaccount balance minus any remaining surrender charge, and subaccount values move with the markets daily. Date-stamp any surrender quote and re-pull it before you make a final comparison against a settlement offer.
What illustration should I request for a variable policy?
Ask for runs at several assumed rates of return and specifically request a 0% net return scenario. The 0% run shows how long the policy survives on charges alone and is the most honest picture of lapse risk. Also ask for the minimum premium required to carry the policy to a target age.
How does New York law affect a VUL settlement?
New York regulates life settlements under New York Insurance Law Article 78 with oversight from the Department of Financial Services, which sets disclosure requirements and a rescission period after funding. Because VUL is also a securities product, additional disclosure steps may apply depending on who advises you. Ask in writing what you are entitled to before signing.
Should I move my subaccounts to cash before selling?
That is an investment decision and this page is not investment advice — speak with your own advisor. What is worth knowing is that a buyer will generally reallocate the policy after purchase toward keeping the death benefit in force at the lowest cost, so your current allocation is not what drives the offer.
What do I need to send to get started?
Only the policy cover page — insurer, policy number, face amount, and issue date. That is enough for a free, no-obligation review that tells you quickly whether the policy is a realistic candidate. You can also call (305) 209-7183 with your latest statement in hand.
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
- How Much Can I Get For My Life Insurance Policy
- Cash Surrender Value Life Insurance
- Life Settlement Vs Surrender
- What Is An In Force Illustration
- What Policies Qualify For Life Settlement
- Sell My William Penn 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.