Can You Sell a Zurich American Whole Life Policy? (2026)

Identify the Issuing Company Before You Do Anything Else

The name printed on the first page of the contract, next to the policy number and issue date, is the legally responsible entity. Everything else, including the name on your premium notice, reflects whoever administers the block today.

The corporate history runs like this. Zurich acquired Kemper in early 1996 through a partnership with Insurance Partners L.P. In September 2003 Zurich sold its Zurich Life retail life operation, including Federal Kemper Life Assurance Company, to Bank One. Bank One merged into JPMorgan Chase in July 2004, and the unit was rebranded Chase Insurance Group. On July 3, 2006 Protective Life Corporation completed its purchase of those companies for approximately $1.165 billion. Kemper Investors Life Insurance Company was retained by Zurich and later renamed Zurich American Life Insurance Company; a separate New York-licensed member serves New York-issued business.

Practically, that means individual permanent coverage issued in the 1980s or 1990s under a Kemper retail name is most likely serviced by Protective Life today, while variable and employer-related legacy business is more likely to sit in the retained Zurich entity’s runoff block. We are not able to confirm that Zurich American Life Insurance Company currently markets a retail participating whole life product, and we are not going to assert one exists. Treat your contract as part of an in-force or closed block until the servicing company tells you otherwise in writing.

Settle it with the NAIC company code from your policy jacket, looked up in the NAIC Consumer Information Source. It returns the current legal entity, domicile, and complaint record. Our general guidance on tracing a policy after a merger covers the paperwork trail when the chain is longer than two steps.

What a Dividend Is, and Why the Scale Has Fallen

If your contract is genuinely participating, an annual dividend is a return of divisible surplus, not interest on an account. The insurer sets a dividend scale each year based on three components: actual mortality experience compared with what was assumed, actual expenses compared with what was assumed, and investment return on the general account portfolio compared with the guaranteed rate built into the pricing.

Dividends are not guaranteed and never have been. What people miss is the direction of travel. Dividend interest rates at major carriers were in double digits in the mid-1980s, when the underlying bond portfolios were earning double digits. Across the industry those rates declined steadily for three decades as older high-coupon bonds matured and were replaced at lower yields, and by the 2020s dividend interest rates at large mutual carriers were broadly in the five to six percent range. A policy purchased on a 1987 illustration was, in effect, projecting an interest environment that no longer exists.

The result shows up in one of two ways. On a contract using dividends to purchase paid-up additions, the death benefit grew more slowly than illustrated. On a contract using dividends to reduce premium, an out-of-pocket premium reappeared where the illustration showed it disappearing. Neither is a breach of anything; both are the difference between a projection and a guarantee.

Ask the carrier for the dividend history on your specific contract, not the company’s published scale. Ten years of actual credited dividends tells you more about what to expect than any brochure. If you want a refresher on how the product is constructed, see what whole life insurance actually is.

Paid-Up Additions Are Separate Assets, and You Can Cash Them Separately

This is the most commonly missed option on a participating contract, and it is worth real money.

Each paid-up addition purchased with a dividend is functionally its own miniature single-premium whole life policy. It has its own guaranteed cash value, its own death benefit, and it is itself participating, so it earns dividends of its own. Over thirty years, the additions layer can become a substantial share of both the total death benefit and the total cash value.

Because they are discrete, paid-up additions can generally be surrendered independently of the base policy. That gives an owner a middle path that nobody advertises: cash out some or all of the additions, take the money, and keep the base policy intact with its original guaranteed death benefit and its original premium. The base contract is unaffected. The death benefit falls by the amount of the surrendered additions, not by the full face amount.

Ask for the numbers separately: base policy guaranteed cash value, additions cash value, additions death benefit, and total. Then ask what surrendering the additions alone would net, and what the resulting death benefit would be. Our page on cashing out paid-up additions works through the mechanics and the tax consequences to raise with your own advisor.

One caution. If dividends have been paying the premium, or partially paying it, surrendering the additions may restore an out-of-pocket premium. Get the projection before, not after.

Option	What you receive	What happens to the death benefit	When it is usually the right answer
Keep paying premiums	Nothing now	Full face amount, guaranteed	The beneficiary still needs the money and premiums are affordable
Surrender paid-up additions only	Additions cash value	Reduced by the additions surrendered; base policy intact	You need cash but want to keep guaranteed base coverage
Reduced paid-up	Nothing now; premiums stop permanently	Lower but fully guaranteed and paid up	Premiums have become unaffordable and coverage still matters
Full surrender	Net cash surrender value	Ends entirely	Coverage no longer needed and cash value is large relative to face
Life settlement	More than surrender value, less than face	Transfers to the buyer	Cash value is small relative to face and the insured is seriously impaired

The Arithmetic That Usually Ends the Settlement Question

A life settlement buyer solves a present-value problem: what can I pay today for a death benefit I will receive at an uncertain future date, after funding premiums the whole time, and still earn a required return. The buyer’s price must exceed the cash surrender value or the seller has no reason to transact, and it must be low enough relative to the death benefit for the return to work.

Run a realistic whole life case. Face amount $250,000. Guaranteed cash value plus additions, $186,000. Annual premium $6,400. Insured is 79 with a life expectancy of roughly eight years. For a buyer to be worth talking to, it must pay more than $186,000. It will also pay roughly $51,000 of premiums over eight years. That is $237,000 of outlay against a $250,000 death benefit, before the cost of capital, before underwriting and closing expenses, before ongoing tracking. There is no transaction there, and no reputable provider will pretend otherwise.

Flip one variable and the picture changes. A policy with a small cash value relative to face, a low premium, and a short life expectancy is exactly the profile the secondary market was built for. That is much more often a universal life or a convertible term contract than a mature participating whole life policy, and the reason is structural: whole life is designed to accumulate cash value, and accumulated cash value is precisely what leaves no room for a buyer.

So the comparison to run is not offer versus nothing. It is surrender value versus offer versus keeping the contract, side by side, with real numbers. Our pages on settlement value against cash surrender value and surrendering versus selling set out that comparison in general terms. The cases where a whole life contract does clear are real but uncommon, and they nearly always involve a badly impaired insured and a cash value that is small relative to the face amount.

Reduced Paid-Up: The Option Nobody Sells You

Before surrendering anything, look at the nonforfeiture options in the contract. Standard nonforfeiture law requires whole life contracts to offer alternatives to simply taking cash, and the most useful of them is reduced paid-up insurance.

Reduced paid-up converts the existing cash value into a smaller, fully paid-up whole life policy. No further premiums are due, ever. The death benefit drops, but it is guaranteed and it will be paid. On the example above, a $250,000 policy with $186,000 of cash value might convert to something in the neighborhood of $215,000 of paid-up coverage, depending on the insured’s age and the contract’s tables, with the $6,400 annual premium gone permanently. For a household under premium pressure that is often a better outcome than either a surrender or a sale, and it costs nothing but a form.

The second nonforfeiture option is extended term insurance, which keeps the full face amount in force for a defined period and then ends. That suits a short, specific need, such as covering a note that matures in six years.

Two things to verify with the carrier before electing either. An outstanding policy loan reduces what is available and can create a taxable event when the contract is restructured. And once elected, a nonforfeiture option is generally not reversible, so it is a one-way decision that deserves an afternoon and a conversation with your own advisor. Our comparison of reduced paid-up against a settlement puts the two beside each other.

Taxes, Loans, and the Documents That Answer Everything

Nothing here is tax advice, and the specifics belong with your own CPA or tax attorney. What follows is how the rules generally operate, so you know what to ask.

On a surrender, the amount received above your cost basis, broadly the premiums paid, is generally taxable as ordinary income. On a sale of a policy, the Tax Cuts and Jobs Act of 2017 changed the basis calculation: it eliminated the prior requirement, reflected in earlier IRS guidance, that basis be reduced by the cost of insurance charges for purposes of determining gain on a life settlement, and it added reporting obligations under Internal Revenue Code section 6050Y for reportable policy sales. That change generally improved the after-tax result of a sale relative to the older rules, and gain above basis up to the cash surrender value is generally ordinary income with the excess generally treated as capital gain. If the contract is a modified endowment contract, distribution rules differ. Our explainer on how tax basis is calculated in a life settlement covers the framework.

Outstanding loans deserve particular care. A loan reduces the death benefit and the surrender proceeds, accrued loan interest compounds, and surrendering a contract with a large loan can produce taxable income substantially larger than the cash actually received. Get the exact payoff figure in writing before deciding anything.

What to request from the carrier, in writing: a current in-force ledger showing guaranteed cash value, paid-up additions value and death benefit, total death benefit, loan balance with accrued interest, and net surrender value; the dividend history for the last ten years; the nonforfeiture options available and the reduced paid-up and extended term figures at today’s values; and confirmation of the issuing entity and its NAIC code.

Regulators. Zurich American Life Insurance Company is domiciled in Illinois and overseen by the Illinois Department of Insurance. If your contract moved to Protective Life Insurance Company, the domiciliary regulator is Tennessee. File any servicing complaint with your own state’s department as well. A settlement transaction is governed by the state where the owner resides, under statutes derived from the NAIC Viatical Settlements Model Act or the NCOIL Life Settlements Model Act, which license providers and brokers, require written disclosure of alternatives to a sale, and provide a rescission window after funding that is commonly fifteen days but set state by state.

Pine Lake Life Solutions offers a free policy review. Send the policy cover page and the in-force ledger, and you will get a plain reading of what the contract guarantees, what surrender and reduced paid-up would actually produce, and whether a secondary market path exists at all, including the frequent case where it does not. If the household also holds term coverage under one of these names, see our page on Zurich American term contracts.

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Frequently Asked Questions

Does Zurich American still sell whole life insurance?

We cannot confirm a currently marketed retail participating whole life product, and we will not assert one exists. Zurich American Life Insurance Company is the Illinois company formerly named Kemper Investors Life Insurance Company, and its heritage business ran to variable and employer-related products. Treat your contract as part of an in-force block until the servicing company confirms otherwise in writing.

Why would surrendering beat a settlement offer?

Because a buyer must pay more than your cash surrender value and then fund premiums for years before collecting a death benefit that may be only modestly larger. When guaranteed cash value has grown to a large share of the face amount, that arithmetic does not leave room for a return. Mature whole life contracts fail this test far more often than they pass it.

Can I cash out paid-up additions without losing my policy?

Usually yes. Each paid-up addition functions as its own small paid-up whole life policy with separate cash value and death benefit, and additions can generally be surrendered independently. The base contract continues unchanged. Confirm one thing first: if dividends have been offsetting your premium, surrendering additions may bring an out-of-pocket premium back.

What is reduced paid-up insurance?

A nonforfeiture option that converts your existing cash value into a smaller, fully paid-up whole life policy with no further premiums due, ever. The death benefit falls but becomes guaranteed and permanent. It costs nothing to elect and is often the best outcome when premiums have become unaffordable but the family still needs some coverage in place.

How does a policy loan affect my options?

It reduces both the death benefit and the surrender proceeds, and accrued interest compounds. Surrendering a heavily loaned contract can create taxable income larger than the cash you actually receive, which surprises people badly. Get the exact payoff amount and accrued interest in writing from the carrier, then discuss the tax consequences with your own advisor before acting.

Are dividends guaranteed to continue?

No. Dividends represent a return of divisible surplus and are declared annually at the insurer’s discretion based on mortality, expense, and investment results. Industry dividend interest rates fell from double digits in the mid-1980s to broadly the five to six percent range by the 2020s. Ask for your own contract’s ten-year dividend history rather than relying on any illustration.

Related Reading

• Sell My Zurich American Term Life Policy
• Life Settlement Vs Cash Surrender Value
• Surrender Vs Sell Policy
• Paid Up Additions Cash Out
• Reduced Paid Up Vs Settlement
• What Is Whole Life Insurance
• Life Settlement Tax Basis Explained
• Carrier Merged Who Owns Policy

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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.