For years, life settlements have been associated almost exclusively with seniors who have experienced significant health declines. Most people—even those in the financial services or insurance sectors—believe that selling a life insurance policy is only an option for clients facing serious health concerns or terminal illnesses.
But the life settlement market is evolving.
There is now a powerful solution available for healthy policyholders: a way to sell their life insurance policies with no medical underwriting required. This unique opportunity allows healthy individuals in their late 60s or older to extract value from their life insurance policies—often policies they no longer need or want to pay for.
In this article, we’ll explore how life settlements for healthy insureds work, who qualifies, what types of policies are eligible, and how to evaluate if this is a good option for you or your client.
What Is a Life Settlement?
A life settlement is the sale of an existing life insurance policy to a third party—usually an institutional investor—in exchange for a lump sum payment. The buyer takes over premium payments and becomes the new beneficiary, receiving the death benefit when the insured passes away.
Traditionally, life settlements are used by seniors (typically 70+) who have experienced a significant change in health and no longer want—or need—their policy. Health status often plays a major role in how much a policy is worth on the secondary market.
However, recent innovations in the marketplace have made it possible for healthy insureds to participate in life settlements—specifically through a niche solution for policies that meet certain criteria.
A Rare Opportunity: Life Settlements Without Medical Underwriting
Yes, it’s true: No medical underwriting required.
In a select set of circumstances, policyholders who are in good health can sell their policies, skip the medical underwriting process entirely, and walk away with a lump sum that offsets years of premium payments. It’s a win-win for those who no longer want the policy, don’t want to pay the premiums, and would rather receive some immediate value.
But there are important requirements to consider. This opportunity isn’t available for just any policy or any individual.
Key Qualification Criteria for Healthy Life Settlements
To qualify for a no-underwriting-required life settlement as a healthy insured, several conditions typically need to be met. Let’s break them down:
1. Policy Type: Guaranteed Universal Life (GUL) Only
The program is limited to a very specific type of policy: Guaranteed Universal Life (GUL).
These policies are ideal for buyers in the secondary market because they offer guaranteed coverage until a specified age (often age 90, 95, or 100), regardless of cash value. That means the policy will not lapse—even if the cash value drops to zero—as long as scheduled premiums are paid.
Unlike standard Universal Life policies that are tied to investment performance and can become unstable without sufficient cash value, GULs offer predictable coverage with lower risk.
2. Policy Size: $500,000 Minimum
Size matters in the life settlement world.
To be considered for a healthy life settlement with no medical underwriting, the policy typically needs to have a minimum face value of $500,000. Smaller policies rarely offer sufficient return for institutional buyers.
3. Insured’s Age: Typically Late 60s or Older
While there can be exceptions, this type of life settlement is generally reserved for policyholders in their late 60s or older. The older the insured, the more attractive the policy becomes from an investment standpoint, even if they are healthy.
4. Premium Schedule Must Be Manageable
Because buyers will take over premium payments, they will evaluate whether the cost-to-return ratio makes sense over the long term. Policies with level premiums or short pay schedules tend to be more attractive.
Why Healthy Insureds Sell Their Life Insurance
You might wonder: if someone is in good health, why would they sell a life insurance policy designed to provide a tax-free death benefit to their loved ones?
Here are some of the most common reasons we see healthy policyholders considering this option:
No Longer Need the Coverage
Many policyholders purchased life insurance decades ago to protect children, a spouse, or to cover estate taxes. But circumstances change. Children grow up, retirement assets increase, and estate tax laws evolve. For some, the original purpose of the policy no longer exists.
Tired of Paying Premiums
Even healthy people in their late 60s or 70s may feel the drag of ongoing premium payments—especially if they’re living on a fixed income or focusing on simplifying finances in retirement.
Want to Recoup Premium Costs
Life insurance can be expensive. Over 10, 20, or 30 years, policyholders may have paid tens or even hundreds of thousands of dollars in premiums. A life settlement can offer a return on that investment, providing cash now instead of allowing the policy to lapse or surrendering it for little to no value.
Desire Greater Financial Flexibility
With the lump sum from a life settlement, individuals can invest, travel, gift to heirs, donate to charity, or simply enjoy their retirement with more freedom.
How Much Is a Healthy Policy Worth?
Unlike traditional life settlements that hinge on life expectancy, policies under this program are valued based on policy structure, not health status.
Valuation will be influenced by:
- Size of the death benefit
- Age of the insured
- Guaranteed coverage period
- Premium schedule
- Carrier ratings and stability
While these policies may not yield the same high payouts as those from individuals with shortened life expectancies, they can still deliver meaningful value—particularly when compared to surrendering the policy or letting it lapse.
The Application Process: Fast and Frictionless
One of the most attractive parts of this offering is the simplicity of the process.
Because medical underwriting is not required, the transaction is often faster and less invasive than traditional life settlements. Here’s what the process typically involves:
- Initial Review
Basic policy and insured information is submitted for review—usually including the policy illustration and premium schedule. - Eligibility Evaluation
A quick assessment determines if the policy meets the buyer’s requirements (e.g., GUL, age, face value). - Preliminary Offer
If the policy is eligible, a preliminary offer may be made without a full application. - Formal Application and Contracting
Once the client accepts, the formal documents are completed, ownership and beneficiary are transferred, and funds are released.
The entire process can often be completed in 30–60 days, depending on carrier responsiveness and documentation.
Comparing Options: Surrender vs. Settlement
When clients are considering getting rid of their policy, they typically face three options:
| Option | What Happens | Typical Value |
| Lapse | Stop paying premiums and lose the policy | $0 |
| Surrender | Cancel the policy and receive cash surrender value | Low to Moderate |
| Life Settlement | Sell the policy for a lump sum | Often 2–5x more than surrender value |
In many cases, healthy insureds are shocked to learn that their policy—previously thought to be a sunk cost—has real, marketable value.
Real-World Scenario
Case Study: John, Age 70
John is a healthy, retired business owner with a $1.5 million Guaranteed Universal Life policy purchased in his early 50s. He originally purchased it for estate tax protection, but his financial situation has since changed. His estate is now below the exemption threshold, and his adult children are financially independent.
John is still paying $18,000 per year in premiums and sees no need to keep the policy active. Rather than surrender it for $60,000, he explores a life settlement and receives an offer for $180,000—three times the surrender value.
With this unexpected cash, John gifts a portion to his grandchildren’s 529 college plans and uses the rest to boost his travel fund.
Who Should Consider This Option?
This healthy life settlement program is ideal for:
✅ Retirees in their late 60s or older
✅ Owners of $500,000+ GUL policies
✅ People who no longer want to pay premiums
✅ Individuals who no longer need the policy for its original purpose
✅ Clients looking to free up cash without affecting their health privacy
It’s not ideal for:
❌ Term life policies (unless convertible to GUL)
❌ Policies under $500,000
❌ Individuals seeking to retain full death benefit
❌ Policies with volatile or high premiums
A Quiet Corner of the Market With Big Potential
Many financial professionals and policyholders remain unaware that this option even exists. That means countless policies are lapsed or surrendered unnecessarily—costing insureds and their families thousands of dollars in lost value.
By educating yourself or your clients about this niche—but powerful—tool, you can unlock real value from life insurance policies that would otherwise be left behind.
Key Takeaways
- Healthy seniors can now sell their life insurance without medical underwriting
- Requires a $500,000+ Guaranteed Universal Life policy
- Ideal for those aged late 60s and up who no longer want to pay premiums
- Lump sum payout can offer meaningful value—even without health issues
- Process is simple, private, and fast
Want to Explore a Healthy Life Settlement?
At SFS Life Settlements, we’ve helped hundreds of clients—healthy and otherwise—get the most from policies they no longer need. If you think you or your client may qualify for this unique opportunity, we’re happy to provide a free, no-obligation policy review.
👉 Contact us to get started today!
Don’t let a valuable policy go to waste.
Discover how much it could be worth today—no medical exams required.