Unlocking the Value of Life Insurance—Even Without a Medical Condition
Most people think life settlements are only for those with serious health conditions. But that’s no longer the full picture.
At SFS Life Settlements, we recently helped a healthy 69-year-old client unlock $400,000 in cash from a life insurance policy she no longer needed—without going through any medical underwriting.
In this post, we’ll unpack how that’s possible, the growing opportunities for healthy insureds, and how advisors and policyholders can tap into this evolving life settlement market.
What Is a Life Settlement?
A life settlement is the sale of a life insurance policy to a third party—usually a financial institution or licensed fund—in exchange for a lump-sum payment that is greater than the policy’s cash surrender value but less than the death benefit.
After the sale:
- The buyer takes over premium payments
- The buyer receives the death benefit when the insured passes away
For the policyholder, it’s a way to gain liquidity from an unwanted, unneeded, or unaffordable policy.
Traditional Eligibility for Life Settlements
Historically, life settlements have been reserved for:
- Seniors aged 70 or older
- With impaired health
- Holding policies with face values of $100,000 or more
Health was the critical factor because buyers calculate value based on life expectancy. The shorter the projected lifespan, the higher the potential return for the buyer.
This is why most advisors and clients still assume that healthy individuals can’t qualify.
But that’s no longer always true.
Case Study: Selling a $6M GUL Policy as a Healthy 69-Year-Old
One of our recent clients—a 69-year-old woman in excellent health—held a $6 million Guaranteed Universal Life (GUL) policy.
The premiums were high, averaging $70,000 to $80,000 per year, and she no longer felt the need for the coverage. Her financial picture had changed, and keeping the policy no longer made sense.
Under traditional life settlement criteria, she wouldn’t have qualified:
- She was under 70
- She was completely healthy
- Her life expectancy was 20–25+ years
But we still got her an offer—$400,000.
Why Did She Qualify?
The short answer: her policy type and today’s changing life settlement market.
1. She Owned a Guaranteed Universal Life (GUL) Policy
GULs are a special type of policy with a very specific benefit: they remain in force even if the cash value drops to zero, as long as the scheduled minimum premiums are paid.
They’re often used as a cost-efficient way to provide lifetime coverage without the volatility of traditional universal life (UL) products. That structure makes GULs attractive to investors in life settlements.
Here’s why:
- GULs provide contractual guarantees (e.g. fixed premiums)
- They’re less risky than policies that lapse if cash value dries up
- They offer more predictable returns for life settlement buyers
2. The Market Has Evolved
In recent years, a new category of institutional buyers has entered the market. These funds are:
- More creative in how they assess risk
- More flexible in underwriting criteria
- Targeting large, predictable policies (like GULs)
Some of these buyers are willing to take on healthy insureds, if the numbers and policy structure work.
This new client qualified because:
- Her policy had a large death benefit ($6 million)
- Her premiums, though high, were predictable
- The policy was a GUL
- A non-traditional fund in our network was looking for exactly this type of opportunity
Breaking the Myth: Do You Need to Be Sick to Qualify?
No.
While health status remains a factor, it’s not always a dealbreaker. Today, certain types of life insurance policies can qualify even if the insured is healthy—especially if the policy is structured like a GUL and meets a few key parameters.
We’re now helping clients who:
- Are in their late 60s to early 70s
- Have high face value policies (typically $500K+)
- Own GULs or convertible term policies
- Have changing financial priorities or simply no longer want to pay premiums
Common Reasons People Consider Selling a Life Insurance Policy
- Premiums Are Too High
As people age, the cost of maintaining a life insurance policy can become burdensome—especially for large face value policies. - The Policy Is No Longer Needed
Perhaps the original purpose—income replacement, estate tax coverage, or business protection—has passed. - They’d Prefer to Use the Cash Today
Life happens. People may need liquidity to fund retirement, pay for healthcare, invest, or help family members. - The Policy Is About to Lapse
If someone plans to let the policy lapse, receiving any offer—even a partial one—is better than walking away with nothing.
The Power of a Life Settlement for Healthy Policyholders
Let’s revisit our client:
- Healthy
- 69 years old
- $6M policy
- $70K+ annual premiums
- Received $400K
- Walked away from the burden, with cash in hand
She would have received nothing if she simply lapsed the policy. Instead, she walked away with a substantial payout—and no more premium obligations.
Types of Policies That May Qualify for Healthy Insureds
Not every policy qualifies, but here are the ones we’re seeing strong interest in from buyers today:
✅ Guaranteed Universal Life (GUL)
The most attractive type of policy due to its structure and predictability.
✅ Convertible Term Policies
If a term policy is convertible to a permanent one, it may become eligible—especially if the insured is over 65 and nearing the end of the term.
✅ Indexed Universal Life (IUL) or Whole Life
Occasionally considered if they carry sufficient cash value and predictable structure, though more common for impaired insureds.
Advisors: What You Should Know
If you’re a financial advisor, insurance broker, estate planner, or fiduciary, you may be sitting on untapped value in your client base.
The opportunity:
- Help clients eliminate policy burdens
- Unlock liquidity from “dead” assets
- Provide guidance in complex situations
- Create win-win scenarios (including potential advisor compensation)
At SFS Life Settlements, we work with advisors across the country to educate, evaluate, and execute successful policy sales.
Policyholders: Is This Right for You?
Ask yourself:
- Do I still need this policy?
- Are the premiums becoming hard to manage?
- Am I considering letting it lapse?
- Do I want more flexibility in retirement?
- Has my financial situation or estate planning changed?
If you answered yes to any of these, a life settlement—even if you’re healthy—might be worth a look.
FAQs About Life Settlements for Healthy Insureds
Do I have to go through a medical exam?
In many cases, no. Especially with GUL policies, some funds will evaluate your eligibility based solely on age and policy structure.
Will I get the full death benefit?
No. You’ll receive a lump sum that is higher than your policy’s cash surrender value—but less than the death benefit.
What happens after I sell my policy?
The buyer assumes all future premiums and becomes the beneficiary. You no longer own or manage the policy.
Is it taxable?
Life settlement proceeds can have tax implications. We recommend discussing your specific situation with a tax advisor.
Final Thoughts: Every Policy Has a Story
Every life insurance policy was purchased with a purpose.
But as life changes—retirement, family dynamics, estate shifts—that original purpose can fade. Rather than let a policy lapse or continue paying high premiums, a life settlement gives you options.
And now, those options are expanding—even for the healthy.
💡 Call to Action: Find Out What Your Policy Is Worth
Whether you’re:
- A financial advisor
- An insurance agent
- A policyholder approaching retirement
SFS Life Settlements is here to help you discover what’s possible.
✅ No pressure
✅ No obligation
✅ Just clarity and value
👉 Click here to request a free policy evaluation
https://sfslifesettlements.com/contact-us/
Let’s turn your policy into a financial solution that works for today.v