Yes. A variable universal life policy from Zurich American Life Insurance Company can be sold in a life settlement, and you do not need the carrier’s blessing, because the buyer is purchasing a contract you already own outright. That right traces back to the 1911 Supreme Court decision in Grigsby v. Russell and is the legal foundation of the entire secondary market in 2026.
Variable universal life, or VUL, is the trickiest permanent policy type to evaluate. Your account value sits in investment subaccounts, so it rises and falls with the markets, while the cost of insurance charged against that account climbs every year as the insured ages. When a weak market meets rising charges, a policy that looked healthy at 65 can be heading toward collapse at 80.
That combination is the most common lapse path in VUL, and it is exactly the moment when selling is worth investigating. Below: who services Zurich American Life contracts today, which documents matter, how a VUL is valued by a buyer, and when keeping or restructuring the policy is the better move. Pine Lake Life Solutions is not affiliated with Zurich American Life Insurance Company.
In This Article
- First, Confirm Who Administers Your Zurich Contract
- How Subaccount Performance Drives Everything
- The Documents a VUL Case Requires
- What Buyers Pay For, and What They Discount
- Hypothetical: Comparing the Four Exits
- Closing a VUL Sale: Ownership Transfer Mechanics
- When Selling Is Not the Right Call
- Where to Get Advice, and How to Start
- Frequently Asked Questions
First, Confirm Who Administers Your Zurich Contract
Zurich American Life Insurance Company is the U.S. life member of Zurich Insurance Group, based in Schaumburg, Illinois. The entity carried a different corporate name earlier in its history and was renamed under the Zurich brand around 2010; verify that against your policy documents. Variable products are also registered securities, so an older VUL may have been distributed through a broker-dealer relationship that no longer exists.
As of 2026, Zurich’s U.S. life activity is oriented more toward group and employer benefits than individual retail sales, and legacy individual blocks may be in runoff or reinsured. Verify the current arrangement with the carrier rather than assuming. The administering office matters because it is the one that issues in-force illustrations, subaccount statements, and change-of-ownership forms.
How Subaccount Performance Drives Everything
In a VUL, your premium buys units in investment subaccounts after charges. Each month the carrier deducts the cost of insurance plus administrative and rider charges from the account value. In strong markets, gains outrun the deductions. In flat or falling markets, the deductions eat principal.
The danger is that the cost of insurance rate itself increases every year with the insured’s age. In the seventies and eighties, those monthly deductions can become very large relative to the account value. Two bad market years at that stage can start a spiral: fewer units, larger relative deductions, faster depletion. Owners often discover this only when a carrier notice arrives warning that the policy will lapse unless a much larger premium is paid.
The Documents a VUL Case Requires
VUL needs more paperwork than any other policy type. Start with the policy cover page and the most recent annual statement showing account value, cash surrender value, and current subaccount allocations. Then request an in-force illustration, and ask for it at more than one assumption.
Specifically, ask for illustrations at a zero percent gross return and at a modest assumed return, both showing the premium needed to carry the policy to age 100. The zero percent version is the honest stress test and it is what a buyer effectively underwrites to. Also gather the product prospectus and any supplements, the current surrender charge schedule if the policy is still inside its surrender period, and a statement of any outstanding loan.
What Buyers Pay For, and What They Discount
A buyer values the death benefit, then subtracts the projected cost of keeping the policy alive. In a VUL, that projected cost is uncertain, so buyers typically underwrite conservatively, assuming little or no investment growth. A policy whose account value is already thin will therefore be priced as though the buyer must fund large premiums for years.
General thresholds still apply: buyers focus on insureds usually 65 and older, death benefits of $100,000 or more, and a health picture that has changed since issue. Where VUL can shine is size. These policies were often sold with large face amounts to people who were healthy and affluent at the time, and a large face amount with declining health is the profile the market responds to best. Settlement proceeds across the market broadly range from about 10% to 35% of face value.
| Document | Who provides it | Why it matters to a VUL offer |
|---|---|---|
| Policy cover page | Your files | Confirms owner, insured, face amount, issue date |
| Most recent annual statement | Carrier service center | Shows account value, surrender value, allocations |
| In-force illustration at 0% return | Carrier, on request | The stress test a buyer effectively underwrites to |
| In-force illustration at an assumed return | Carrier, on request | Shows how much of the plan depends on markets |
| Product prospectus and supplements | Carrier or broker-dealer | Defines charges, subaccounts, and rider terms |
| Loan and surrender charge statement | Carrier service center | Loans cut the net death benefit and the offer |
| HIPAA authorization | You sign it | Allows life expectancy review, which drives pricing |
Hypothetical: Comparing the Four Exits
Consider a hypothetical 80-year-old with a $750,000 Zurich VUL. The account value has fallen to $40,000, the cash surrender value is $34,000 after remaining charges, and the carrier now wants roughly $28,000 a year to keep it in force. Four paths exist: keep paying, surrender for $34,000, reduce the death benefit to something the account can support, or sell.
Those figures are illustrative, not a quote. But they show the shape of the problem. Paying $28,000 a year out of retirement income is not sustainable for most households. The GAO’s 2010 report, GAO-10-775, found settlement payouts running roughly four to eight times cash surrender value, which is why the sale option deserves a look before anyone signs surrender paperwork. A reduced paid-up or lower face amount option is also worth pricing, because it may preserve some coverage at no further cost.
Closing a VUL Sale: Ownership Transfer Mechanics
Settlements close with an absolute assignment, meaning the carrier’s change-of-ownership and change-of-beneficiary forms are filed and recorded. With variable products, the carrier may also require the new owner to complete suitability or account paperwork tied to the separate account, which can add time.
Funds sit in escrow until the carrier confirms the transfer. Expect the full timeline to run about 60 to 120 days. Most states also grant the seller a rescission period after funds are received, often around 15 days, during which the transaction can be reversed by returning the money. Verify the specific rule that applies to your situation.
When Selling Is Not the Right Call
If the account value is healthy and the projected premium is affordable, keeping the policy usually wins, especially when the death benefit is still earmarked for a spouse or a dependent. A VUL that was funded aggressively early can sometimes carry itself for years with no further premium; the in-force illustration will show whether that is true.
Restructuring is the underrated middle path. Reducing the face amount, switching the death benefit option, or reallocating subaccounts to something less volatile can cut the required premium substantially. And if the insured is terminally ill, check for an accelerated death benefit rider, which pays quickly without any sale. A settlement makes sense when the premium is unaffordable, the need has passed, or cash is required for care now.
Where to Get Advice, and How to Start
Settlement proceeds are generally taxed in layers tied to your basis in the policy, and the 2017 federal tax law changed how part of that basis is figured. A VUL adds a wrinkle because gains inside the contract affect the calculation. This is a description of how the rules are organized, not tax advice; a CPA should run your actual numbers. If Medicaid or long-term care planning is involved, an elder law attorney should look at it before you convert coverage into cash.
For a plain-English read on whether a Zurich American Life VUL is a candidate, send the policy cover page for a free policy review or call (305) 209-7183. We can tell you quickly whether the profile fits what buyers are looking for in 2026.
Frequently Asked Questions
My VUL lost value in the market. Is it still sellable?
Often yes, and sometimes the loss is what makes selling worth exploring. Buyers pay primarily for the death benefit, not the account value. A depleted account raises the premium a buyer must fund, which lowers the offer, but it does not by itself disqualify the policy.
Why do buyers want an illustration at zero percent return?
Because it shows the true cost of carrying the policy if the markets deliver nothing. Buyers underwrite conservatively, so the zero percent projection is closer to how they will price the case than an optimistic assumption.
Does a surrender charge affect what I can sell the policy for?
Not directly. Surrender charges reduce what you would receive if you cashed out, which is one reason surrender values look poor in the early years. In a sale, the buyer is acquiring the contract rather than surrendering it, so the charge is not deducted from your proceeds.
Can I sell only part of a VUL policy?
Sometimes a partial arrangement is possible, where a portion of the death benefit is retained for the family. Availability depends on the buyer and the contract. Ask about it during the review rather than assuming it is off the table.
Does Zurich American Life have to approve the transaction?
No. The carrier records the ownership and beneficiary change once the sale closes. Variable products sometimes require extra paperwork tied to the separate account, but that is administrative, not approval.
How long will it take?
Generally 60 to 120 days from first review to funding, including medical record retrieval, life expectancy analysis, offer negotiation, and carrier processing.
What if I would rather keep some coverage?
Ask the carrier to illustrate a reduced face amount and a change in death benefit option before selling. Cutting the face amount can dramatically lower the premium and may let you keep meaningful coverage without further out-of-pocket cost.
Is Pine Lake connected to Zurich in any way?
No. Pine Lake Life Solutions is independent of Zurich American Life Insurance Company and Zurich Insurance Group. Questions about your contract’s specific terms should go to the carrier’s service center.
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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.