Frequently Asked Questions
Your Settlement Questions, Clearly Answered.
Exit Equity Concierge | FAQs
Our Frequently Asked Questions section provides helpful information about life settlements and viatical settlements, including how the process works, who qualifies, and how policyholders may be able to sell a life insurance policy for cash. You’ll find answers to common questions about eligibility, policy types, potential settlement value, timelines, tax considerations, and what to expect when exploring your options. At Exit Equity Concierge, we believe informed decisions begin with clear information, and this resource is designed to help you better understand the potential value of your life insurance policy.
Understanding Your Options
A life settlement is a financial transaction in which a life insurance policy owner sells their policy to a third-party buyer for a lump-sum cash payment.
The amount received is typically greater than the policy’s surrender value but less than the death benefit. Once the sale is completed, the buyer becomes the new owner and beneficiary of the policy and assumes responsibility for paying all future premiums.
Life settlements are often considered by policyholders who:
No longer need their life insurance coverage
Can no longer afford the premiums
Have experienced changes in health or financial circumstances
Prefer to access the value of their policy during their lifetime
Through the life settlement process, a policy that might otherwise be surrendered or allowed to lapse may provide meaningful financial value.
At Exit Equity Concierge, we help clients evaluate their policy and guide them through the settlement process while working with licensed settlement providers.
Life settlement transactions are facilitated through licensed settlement providers and are subject to state regulations.
Several types of life insurance policies may qualify for a viatical or life settlement, provided the policy meets certain criteria related to policy value, premiums, and the insured’s age or health status.
Policies that commonly qualify include:
Universal Life Insurance
Whole Life Insurance
Convertible Term Life Insurance (term policies that can be converted to permanent coverage)
Some Group Life Insurance Policies
In most cases, eligible policies have a death benefit of $100,000 or more, although larger policies often attract greater interest from buyers.
Other factors that may influence eligibility include:
The insured’s age or health condition
The cost of future premium payments
The type and structure of the policy
Because each policy is unique, determining eligibility typically requires a confidential review of the policy and supporting information.
At Exit Equity Concierge, we help clients submit their policies for evaluation and work with licensed settlement providers to determine whether a policy may qualify for a life or viatical settlement.
Still Have Questions About Your Policy?
We understand that life settlements and viatical settlements can raise important questions. If you didn’t find the answer you were looking for in our FAQs, our team is here to help. Exit Equity Concierge provides confidential policy reviews to help determine whether your life insurance policy may qualify for a life settlement or viatical settlement. Speak with an advisor to explore your options and better understand the potential value of your policy.
Most Popular Questions
Many policyholders are unaware that their life insurance policy may have value on the secondary market. Through a life settlement or viatical settlement, eligible policyholders may be able to sell a life insurance policy for a lump-sum cash payment. Browse our most popular questions below or speak with Exit Equity Concierge to learn how much your policy may be worth.
Do You Qualify?
Qualification for a settlement generally depends on a combination of age, health condition, and the type of life insurance policy owned. While each case is unique, the general guidelines differ slightly between viatical and life settlements.
Life Settlements
Life settlements are typically available to policyholders who:
Are generally age 65 or older (though younger individuals with health changes may also qualify)
Own a life insurance policy with a death benefit typically starting around $100,000 or more
Have a policy that is no longer needed, affordable, or aligned with their financial goals
Policies that may qualify often include universal life, whole life, and some convertible term policies.
Viatical Settlements
Viatical settlements are designed for individuals who have been diagnosed with a serious or life-limiting illness, as defined by federal and state guidelines.
In these situations, eligibility may depend on:
A diagnosis of a terminal or chronic illness
Ownership of a qualifying life insurance policy
Medical documentation supporting the health condition
Because every policy and situation is different, eligibility is typically determined after a confidential policy and medical review.
At Exit Equity Concierge, we help clients submit their policy information for review and work with licensed settlement providers to determine whether a policy may qualify for a life or viatical settlement.
Yes. In order to sell a life insurance policy through a life settlement or viatical settlement, the individual initiating the transaction must generally be the legal owner of the policy. The policy owner has the authority to transfer ownership of the policy to a buyer in exchange for a settlement payment.
If the insured person and policy owner are different individuals, the policy owner must consent to the transaction, and the insured must also typically provide authorization for medical records to be reviewed during the evaluation process.
At Exit Equity Concierge, we help review ownership details to ensure the settlement process can move forward smoothly.
If life insurance premiums are no longer paid, the policy may eventually lapse and terminate, which means the coverage ends and the policy may lose its value.
Before allowing a policy to lapse, some policyholders explore other options that may provide financial value, including:
- Selling the policy through a life settlement
- Surrendering the policy for its cash value
- Reducing the policy coverage
- Converting certain term policies to permanent coverage
A life settlement may provide significantly more value than surrendering the policy or allowing it to lapse, depending on the policyholder’s age, health, and policy structure.
At Exit Equity Concierge, we help review policies to determine whether they may qualify for a settlement before coverage is lost.
What is Your Policy Worth?
The amount you may receive from a settlement depends on several factors, including your age, health status, policy type, premium costs, and the size of the policy’s death benefit.
In general:
Life settlements may provide approximately 10% to 60% of the policy’s death benefit, depending on the policyholder’s age, health, and policy structure.
Viatical settlements often result in higher payout percentages, sometimes ranging from 50% to 80% of the death benefit, due to the serious health conditions involved.
Other factors that influence the settlement value include:
The type of life insurance policy (universal, whole, or convertible term)
The ongoing premium costs required to maintain the policy
The policy’s face value
The insured’s life expectancy
Because each policy is unique, the best way to determine potential value is through a policy review and market evaluation.
At Exit Equity Concierge, we help clients submit their policies for review so licensed settlement providers and institutional buyers can determine the potential settlement offers available.
In some cases, yes. A partial life settlement may allow a policyholder to sell a portion of their life insurance policy while keeping a reduced death benefit in place for beneficiaries.
With a partial settlement:
- A portion of the policy is sold to generate immediate cash
- The remaining coverage may stay in force for beneficiaries
- Future premium obligations may be reduced or eliminated
Partial settlements are not available in every situation, but they may be considered depending on the policy structure and the insured’s circumstances.
At Exit Equity Concierge, we help clients explore whether a full or partial settlement may be possible.
It depends on the type of settlement.
Life Settlements
In most life settlements, the proceeds you receive are yours to use however you choose. Policyholders commonly use the funds to:
- Supplement retirement income
- Pay off debt
- Support family members
- Fund travel or personal goals
- Invest or strengthen financial security
Once the transaction is completed, there are generally no restrictions on how the funds are used.
Viatical Settlements
Viatical settlements are designed for individuals facing a serious or life-limiting illness, and the funds are typically intended to support medical care, treatment, or quality-of-life needs.
Common uses include:
- Medical treatments or specialized care
- Long-term care services
- Hospice or in-home care
- Living expenses during illness
- Comfort and quality-of-life support
One important advantage of viatical settlements is that the proceeds are generally received tax-free under federal law when eligibility requirements are met.
A Thoughtful Note
Every situation is unique. Clients should consult with a tax advisor or financial professional regarding how settlement proceeds may affect their personal financial situation.
At Exit Equity Concierge, we help clients explore both options with clarity so they can choose the path that best supports their health, family, and financial goals.
Not sure what your policy may be worth?
How the Process Works?
Starting the viatical settlement process is simple and confidential.
The first step is to submit basic information about your life insurance policy and health status so that eligibility can be reviewed. This typically includes:
- Details about your life insurance policy
- Authorization to obtain medical records
- Basic personal and contact information
Once the information is received, licensed settlement providers review the policy and medical records to determine whether the policy may qualify for a viatical settlement.
If eligible, the policy may then be presented to institutional buyers who may submit offers. You can review any offers received and decide whether moving forward with a settlement is the right choice for you.
At Exit Equity Concierge, we guide clients through each step of the process and work with licensed settlement providers to help facilitate the transaction with professionalism, discretion, and care.
All information submitted during the review process is handled confidentially.
The life settlement process typically takes 4 to 12 weeks, depending on how quickly the necessary documents and medical records can be obtained.
Several steps take place during this time, including:
- Reviewing the life insurance policy and determining eligibility
- Obtaining and reviewing medical records
- Evaluating the policy through licensed settlement providers
- Presenting the case to potential institutional buyers
- Reviewing and accepting an offer
- Completing closing documents and transferring policy ownership
<br>
Once the closing documents are signed and the insurance carrier confirms the ownership transfer, settlement funds are typically released within a few business days.
At Exit Equity Concierge, we help guide clients through each stage of the process while working with licensed settlement providers to help facilitate the transaction efficiently and transparently.
The Viatical Settlement process is often faster than a traditional life settlement, although the exact timeline can vary.
In many cases, a viatical settlement may take approximately 2 to 8 weeks from the time a complete application and medical authorization are submitted.
The process typically includes:
- Reviewing the life insurance policy
- Obtaining and evaluating medical records
- Determining eligibility for a viatical settlement
- Presenting the policy to licensed settlement providers and potential buyers
- Reviewing and accepting an offer
- Completing closing documents and transferring policy ownership
Because viatical settlements involve individuals with serious or life-limiting health conditions, the review and underwriting process may be expedited.
Once closing documents are signed and the insurance carrier confirms the policy transfer, funds are usually released within a few business days.
At Exit Equity Concierge, we guide clients through each step of the process while working with licensed settlement providers to help facilitate the transaction efficiently and respectfully.
Once your life settlement is finalized, ownership of the life insurance policy transfers to the buyer, who becomes responsible for all future premium payments. In return, you receive the agreed-upon cash settlement.
After closing documents are signed and the policy transfer is confirmed by the insurance carrier, settlement funds are typically released within a few business days.
At that point:
- The policy is no longer your financial responsibility
- The buyer assumes all future premium payments
- You are free to use the settlement proceeds according to your needs and priorities
For many clients, these funds provide immediate financial flexibility to support retirement planning, medical needs, debt reduction, or family support.
For individuals seeking additional guidance around legacy planning, end-of-life coordination, or family preparation, The Doula Experience—our sister organization—offers compassionate support and planning services designed to help individuals and families navigate life’s transitions with clarity and care.
Learn more: www.TheDoulaExp.com
Privacy, Safety, and Legality
Yes. Both viatical settlements and life settlements are legal financial transactions and are regulated in most states.
These transactions allow life insurance policy owners to sell their policies to licensed buyers in exchange for a lump-sum cash payment. After the sale, the buyer becomes the new policy owner and assumes responsibility for paying future premiums.
To protect consumers, the life settlement industry is subject to state regulations, licensing requirements, and disclosure rules. These regulations are designed to ensure transparency and to safeguard the interests of policyholders throughout the process.
Because regulations vary by state, settlement transactions must be facilitated through properly licensed settlement providers and brokers.
At Exit Equity Concierge, we work with licensed settlement providers to help ensure that each transaction follows the appropriate legal and regulatory guidelines.
Yes. The viatical settlement process is handled with a high level of confidentiality and professionalism.
In order to evaluate a policy, certain personal information—such as medical records and policy details—must be reviewed by licensed settlement providers and potential institutional buyers. However, this information is handled securely and only shared with parties directly involved in evaluating the settlement.
In most cases:
Personal and medical information is protected under privacy and confidentiality regulations
Medical records are reviewed solely to determine eligibility and life expectancy evaluations
Buyers typically review cases using anonymized or limited identifying information
At Exit Equity Concierge, we prioritize discretion and ensure that all information shared during the evaluation process is handled respectfully and confidentially.
Investors purchase life insurance policies in a life settlement because the policy’s death benefit may represent a long-term financial asset. After purchasing the policy, the investor becomes the new owner and continues paying the premiums required to keep the policy active.
When the insured person eventually passes away, the investor receives the death benefit from the insurance company. Because of this structure, investors evaluate policies based on factors such as the insured’s age, health condition, policy type, premium costs, and estimated life expectancy.
Life settlements create an opportunity for policyholders to receive immediate financial value from a policy that may no longer serve their needs, while investors assume the future premium obligations and associated risk.
Important Considerations
When a life insurance policy is sold through a life settlement or viatical settlement, ownership of the policy transfers to the buyer.
The buyer becomes the new policy owner and beneficiary and assumes responsibility for paying all future premium payments required to keep the policy active.
When the insured person eventually passes away, the buyer receives the death benefit from the insurance company, as they now hold the rights to the policy.
In exchange for transferring the policy, the original policyholder receives a lump-sum cash payment at the time of the settlement. This payment is typically greater than the policy’s surrender value but less than the full death benefit.
In some cases, partial life settlements may allow a portion of the death benefit to remain in place for beneficiaries while still providing the policyholder with immediate funds.
At Exit Equity Concierge, we help clients carefully review their options so they can make informed decisions that align with their financial needs and legacy goals.
No. Once a life insurance policy is sold through a life settlement or viatical settlement, the buyer becomes the new owner of the policy and assumes responsibility for all future premium payments.
This means:
You are no longer responsible for paying premiums on the policy
The buyer maintains the policy by paying all required premiums
You receive the agreed-upon lump-sum settlement payment once the transaction is completed
Because the buyer takes over the financial responsibility of maintaining the policy, policyholders are often able to relieve themselves of ongoing premium costs while accessing the value of the policy during their lifetime.
At Exit Equity Concierge, we guide clients through this process and work with licensed settlement providers to ensure that the policy transfer and closing process are completed smoothly.
When a life settlement is completed, the buyer becomes the new owner and beneficiary of the policy. This means your original beneficiaries will generally no longer receive the policy’s death benefit.
However, many families choose a life settlement because it allows the policyholder to access significant funds while they are still living, rather than allowing the policy to lapse or surrendering it for a much smaller amount.
In many situations, the proceeds from a life settlement can actually benefit the family now, helping to cover:
- Medical or long-term care expenses
- Living costs or debt reduction
- Support for loved ones
- Financial stability during retirement
In some cases, partial life settlements may also be possible, allowing a portion of the death benefit to remain for beneficiaries while still generating immediate funds for the policyholder.
At Exit Equity Concierge, we encourage clients to include family members in the conversation, so the decision reflects both present needs and future legacy goals.
Tax Considerations
A life settlement payout may be partially taxable, depending on the policyholder’s individual circumstances.
In general, the tax treatment is based on how the settlement amount compares to the total premiums paid into the policy (known as the cost basis) and the policy’s surrender value.
For many policyholders:
- The portion of the settlement up to the total premiums paid is typically not taxable
- Any amount above the premiums paid but below the policy’s death benefit may be subject to taxation
- The exact tax treatment can vary depending on the structure of the policy and the policyholder’s financial situation
Because tax rules can be complex and may change over time, individuals considering a life settlement should consult with a qualified tax advisor or financial professional to understand how the proceeds may affect their specific tax situation.
In many cases, viatical settlement proceeds are not taxable under federal law, provided certain eligibility requirements are met.
A viatical settlement generally involves a policyholder who has been diagnosed with a serious or life-limiting illness, and the settlement is structured to provide financial support during that time.
Under federal tax guidelines, viatical settlement proceeds may be received tax-free when:
- The insured individual is chronically or terminally ill, as defined by law
- The settlement is completed through a properly licensed viatical settlement provider
Because individual circumstances and tax regulations can vary, policyholders should consult with a qualified tax advisor or financial professional to understand how settlement proceeds may apply to their specific situation.
Viatical settlement proceeds may be tax-free under federal law when certain eligibility requirements are met.
At Exit Equity Concierge, we work with licensed settlement providers to help ensure the process follows the appropriate regulatory guidelines.
Take the Next Step with Confidence
Get a confidential review of your policy and understand what options may be available to you.
Call or text us directly for immediate support
Life settlement FAQs, viatical settlement process, selling a life insurance policy, life insurance policy value, and life settlement eligibility.