How Long Does a Life Settlement Take?

One of the most common questions seniors ask before starting a life settlement is a simple one: how long does a life settlement take? It is a fair question — and the answer matters, especially if you need the funds for a specific purpose. The good news is that most life settlements close in 60 to 120 days, and the process moves along in predictable steps. This guide walks you through exactly what happens and when, so you know what to expect every step of the way.

The Short Answer: 60 to 120 Days

For most policyholders, a life settlement takes between two and four months from start to finish. Some straightforward cases close faster — in as little as 45 days. Others, particularly those involving older policies, complex medical histories, or carrier delays, can take a bit longer.

The biggest factor is usually not something you control: it is how quickly your insurance carrier and your doctors respond to information requests. At Lifestone, we manage all of that communication on your behalf. Your job is simply to say yes, sign a few forms, and let us handle the details.

If you are curious about what a life settlement actually is, that article is a good place to start before reading about the timeline here.

Step 1: Application and Policy Review (Days 1–10)

Everything starts with a free policy review. You share some basic information about your policy — the type of coverage, the face value, the insurance company, and your age. This takes about five minutes.

From there, Lifestone reviews your policy to confirm it is a good candidate for the market. We look at things like the face value, policy type, and your health profile. If your policy qualifies, we move forward. If it does not, we tell you honestly — there is never any cost or obligation either way.

Once you decide to proceed, we send you a short intake form and a HIPAA authorization so we can request your medical records. These documents are straightforward, and many clients complete them the same day they receive them. The faster this step happens, the faster everything else follows.

According to Investopedia, a life settlement involves transferring ownership of a life insurance policy to a third-party buyer who pays you a lump sum — typically significantly more than the policy's cash surrender value. The process begins with this initial eligibility check.

Step 2: Medical Records and Underwriting (Days 10–45)

This is the step that takes the most time — and it is almost entirely out of your hands. After you sign the HIPAA authorization, we contact your doctors and request your medical records. We also reach out to your insurance carrier to confirm your policy details and request what is called an in-force illustration, which shows the current status of the policy.

Medical records can take anywhere from a few days to several weeks to arrive, depending on how quickly the medical office responds. Once we have everything, the records go to institutional buyers for underwriting. These buyers are essentially evaluating the policy to determine what they are willing to pay.

Most underwriting decisions come back within one to two weeks of receiving the records. So the total time for this step can range from two to five weeks depending mostly on how quickly records arrive.

It is worth noting that a change in your health — especially a serious illness — can actually increase what your policy is worth. Buyers factor in life expectancy when making offers, and certain health changes make a policy more attractive to the market.

Step 3: Offers and Negotiation (Days 45–75)

Once underwriting is complete, offers come in from multiple buyers. As a broker, Lifestone works with a network of institutional buyers, which means we can present your policy to several parties at once and let them compete for it. This competition is what drives up the price you receive.

You are not locked into any offer. We present the best offers to you, explain what each one means in plain language, and give you time to ask questions. You choose whether to accept, decline, or negotiate. There is never pressure to move faster than you are comfortable with.

According to Forbes, the average life settlement pays out between 10% and 25% of a policy's face value, though the exact amount depends on the policy size, type, and the insured's health profile. In many cases, this is dramatically more than the surrender value the insurance company would offer.

Once you accept an offer, you sign a purchase and sale agreement. This formally transfers ownership of the policy to the buyer and sets the closing process in motion.

Step 4: Closing and Getting Paid (Days 75–120)

After you accept an offer, the closing process begins. The buyer notifies the insurance company of the ownership transfer and completes the necessary paperwork. The insurance carrier then processes the change of ownership — this is the step that most commonly adds time to the process, since carriers vary widely in how quickly they process these requests.

Some carriers process ownership changes in a week or two. Others take four to six weeks. Once the carrier confirms the transfer, the buyer releases your payment. Funds are typically sent by wire transfer or check, and most clients receive their money within a few days of the carrier's confirmation.

From the day you accept your offer to the day you receive payment, closing usually takes three to six weeks. Add that to the time spent on underwriting and you arrive at the 60-to-120-day total window for most transactions.

If you have been wondering how a life settlement compares to simply surrendering your policy, our article on surrendering versus selling breaks down the financial difference clearly.

What Can Slow the Process Down?

Most delays come from a handful of common sources. Knowing them in advance can help you avoid them:

• Slow medical records: Doctors' offices and hospital systems vary widely in how quickly they respond to records requests. Following up proactively — which Lifestone does on your behalf — makes a big difference.
• Incomplete intake forms: Missing signatures or blank fields on the initial paperwork can pause everything until they are corrected. Completing your forms carefully the first time saves days.
• Carrier processing times: Some insurance companies are notoriously slow at processing ownership changes. This is largely outside everyone's control, but experienced brokers know which carriers move quickly and can set expectations accordingly.
• Delayed illustrations: Requesting the in-force illustration from your carrier is a necessary step, and some carriers take longer than others to produce it.
• Policy loans or assignments: If your policy has an outstanding loan or an irrevocable beneficiary, additional steps may be required before a sale can close. These situations are manageable but do add time.

At Lifestone, we actively manage each of these steps so delays are minimized. AARP notes that working with an experienced broker — rather than going directly to a single buyer — typically results in better offers and a smoother process, because the broker handles the complexity on your behalf.

The bottom line is this: a life settlement takes a few months, not a few years. If you have been hesitating because you were worried the process would drag on indefinitely, that concern is understandable — but for most people, it moves along steadily once it gets started. The hardest step is simply making the first call.