Understanding the process of selling your unwanted life insurance policy
Each individual scenario could be different based on the parameters of the transaction.

Step 1 | Discovery:
Policy owner realizes that his/her life insurance policy is an asset that can be sold.
Step 2 | Representation:
If a life settlement is determined to be the best option, the policy owner or the advisor contacts a member of the Life Insurance Settlement Association who is either a life settlement broker or provider to begin the process. It's possible to engage in a life settlement through both.
Step 3 | Application:
After choosing proper representation to settle a policy, the policy owner must fill out an application and provide policy, ownership and insured information including a list of physicians and/or medical records for underwriting. It is crucial that you discuss all your privacy and security rights.
Step 4 | Underwriting:
The settlement company submits the medical records for review by an independent life expectancy company. Life expectancy companies calculate the probable life expectancy using actuarial and physician experts.
Step 5 | Analysis:
Each life settlement provider/buyer calculates the market value for the policy presented for sale. Companies may consider different factors when valuing a policy, including contract specifics such as premium expense, death benefit and carrier ratings, as well as insured information such as age and life expectancy underwriting.
Step 6 | Offer:
The provider/buyer will either decline or extend an offer to the policy owner or broker. A broker will seek competing offers from other providers/buyers. The policy owner can accept or decline any offer.
Step 7 | Purchase and Sale Agreement:
If the policy owner accepts an offer, the provider that made the offer will prepare a purchase and sale agreement and other documents formalizing the transaction. The policy owner, insured and beneficiaries then sign this package. The provider will review, complete due diligence and countersign the package. The funds for the settlement transaction are then placed in an escrow account.
Step 8 | Notification:
The insurance carrier is notified of the change of policy ownership and beneficiary to the new owner, the provider.
Step 9 | Funds Transfer:
Upon written verification of the change of ownership and beneficiary, the escrow agent releases the settlement payment to the seller of the policy.