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Life Settlement Calculator
Estimate Your Policy Value

Find out how much your life insurance policy could be worth in a life settlement. Enter your policy details to get an instant estimate.

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Life Settlement Calculator: How Much Can You Get for Your Policy?

A life settlement lets you sell your life insurance policy to a third-party investor for a lump sum that is greater than the cash surrender value but less than the death benefit. Our free life settlement calculator estimates your potential settlement offer based on your policy type, face value, insured age, health status, and premium history — giving you a realistic ballpark before you engage a broker.

How Life Settlement Value Is Calculated

Settlement Offer = Face Value × Settlement Ratio

The settlement ratio is driven primarily by life expectancy:

  • Life expectancy < 5 years: 70–80% of face value
  • Life expectancy 5–10 years: 40–60% of face value
  • Life expectancy 10–15 years: 20–35% of face value
  • Life expectancy > 15 years: 5–15% of face value

Life expectancy is estimated from your age and health status. Poor health significantly shortens life expectancy, increasing the settlement ratio.

Life Settlement vs. Surrendering Your Policy

Lapse / Stop Paying
$0
You lose all premiums paid and get nothing
Cash Surrender Value
2–10% of face value
Insurer pays out accumulated cash value
Life Settlement
10–50%+ of face value
Third-party pays above CSV — often 3–5× more

Who Should Consider a Life Settlement?

  • Policyholders aged 65 or older who no longer need the coverage
  • Retirees struggling to afford rising insurance premiums
  • Business owners whose key-person or buy-sell policy is no longer needed
  • Anyone who has experienced a change in financial circumstances or estate planning needs
  • Policyholders with a $100,000+ face value policy considering letting it lapse

Frequently Asked Questions

What is a life settlement?▾
A life settlement is the sale of an existing life insurance policy to a third-party buyer for a lump sum cash payment. The amount you receive is more than the cash surrender value (CSV) but less than the face value (death benefit). The buyer takes over premium payments and collects the death benefit when the insured passes away.
How much can I get for my life insurance policy?▾
Life settlement offers typically range from 10% to 50% of the policy's face value, depending on the insured's age, health status, life expectancy, and the policy's terms. Older insureds with shorter life expectancies generally receive higher offers. A $500,000 policy could yield $50,000 to $250,000 or more in a life settlement.
Who qualifies for a life settlement?▾
Most life settlement buyers look for policyholders who are 65 or older, have a life insurance policy with a face value of $100,000 or more, and have experienced a change in health or financial circumstances. Policies that have been in force for at least 2 years are typically eligible. Both term and permanent policies may qualify.
What is the difference between a life settlement and a viatical settlement?▾
A life settlement is for seniors (typically 65+) who want to sell their policy for financial reasons, regardless of health status. A viatical settlement is specifically for people who are terminally or chronically ill and have a life expectancy of 24 months or less. Viatical settlements usually yield a higher percentage of face value due to the shorter life expectancy.
Are life settlement proceeds taxable?▾
Life settlement proceeds may be partially taxable. The portion up to your cost basis (total premiums paid) is generally tax-free. Amounts above your cost basis but below the cash surrender value may be taxed as ordinary income. Any amount above the cash surrender value could be taxed as a capital gain. Consult a qualified tax advisor for your specific situation.

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