One of the most common questions agents have when they first learn about life settlements is simple: does my client's policy actually qualify?
The answer depends on several factors — policy type, face value, the insured's age and health, and current market conditions. This guide gives you a practical framework for quickly identifying which clients are worth a conversation.
The Four Primary Factors Buyers Look At
1. Age of the Insured
The insured must generally be 65 or older. Older insureds tend to receive stronger offers because life expectancy plays a direct role in how much a buyer is willing to pay. A 78-year-old with a $500,000 policy will typically command a higher offer than a healthy 66-year-old with the same policy.
2. Face Value of the Policy
Most buyers look for policies with a face value of $100,000 or more. Policies below that threshold rarely attract competitive bids. The sweet spot is $250,000 and above.
3. Policy Type
Permanent life insurance policies qualify most often:
- Universal Life (UL)
- Indexed Universal Life (IUL)
- Variable Universal Life (VUL)
- Whole Life
- Survivorship / Joint Life policies
- Convertible term policies
Standard term policies that are not convertible are generally harder to place, though not impossible depending on the insured's health and remaining term.
4. Health of the Insured
A decline in health since the policy was originally issued often increases the policy's value in the secondary market. Buyers are pricing based on life expectancy — a shorter expected lifespan means the buyer reaches the death benefit sooner, which increases what they're willing to pay today.
A client who was in perfect health when they bought the policy 20 years ago but has since been diagnosed with a serious condition may be a very strong candidate.
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Check My Policy ValueQuick Reference: Strong vs. Weak Candidates
Strong Candidate
- Age 70+
- Policy face value $250,000 or more
- Universal life, whole life, or convertible term
- Some health decline since original policy issue
- Looking to lapse, surrender, or reduce premiums
Weaker Candidate
- Under 65
- Face value under $100,000
- Non-convertible term with many years remaining
- Excellent health with long life expectancy
- Policy recently issued (less than 2 years)
Group Life and Employer Policies
Group life insurance policies issued through an employer can sometimes qualify, but the rules are more complex. Portability and conversion rights matter significantly. If a client has a large group policy they are eligible to convert to an individual policy, that converted policy may be eligible for a life settlement.
What to Do When You Spot a Candidate
You don't need to make the determination yourself. If a client looks like they could fit the general profile, the right move is to refer them for a free evaluation. Lifestone Settlements will review the policy details, reach out to the client, and give them a clear picture of whether a life settlement makes sense — at no cost and with no obligation.
Ready to refer a client or learn more about the process?
Whether you have a client in mind or just want to understand how it works, we're happy to walk you through it. Schedule a quick call or submit a referral anytime.
Lifestone Settlements is a life settlement broker based in Lighthouse Point, Florida. Life settlements are regulated transactions. Eligibility and offer amounts vary based on individual policy and health factors. This content is intended for licensed insurance professionals and financial advisors. It does not constitute legal or financial advice.
