How to Know if You Can
Sell Your Principal
Life Insurance Policy
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Sell Your Life Insurance Policy Calculator
Over time the need for life insurance can decrease and the money you are spending on premiums could be better used elsewhere. While many consider their only option being reducing, cancelling or lapsing their policies, there is another option; sell the policy. This often puts much needed funds in your pocket and after paying premiums for so many years this is an option you deserve to consider. We are here to help by providing our experience and all the information you might need.
First, understand selling a life insurance policy is not for everyone and not everyone qualifies. Discovering the highest amount you could sell your policy for is important, and you have no obligation to accept an offer. There is never a cost to you for evaluating your policy.
By using our policy value calculator, you can get a quick estimate of how much your policy could be worth.
Principal Term Policy Options
Keep As Term
When a Principal term policy reaches the end of the level term period it becomes an Annual Renewable Term (ART). The ART premium increases each year and can become very expensive, very quickly. After the end of the term the policy cannot be converted and can rarely be sold.
Convert Policy
Up until the end of the term period (or prior to certain age) you can convert all or part of your term policy. There is no health underwriting for the new permanent product. However, the cost of the premiums is higher (see comparison below).
Sell Policy
Life insurance is an asset and can be sold (like a house). Any of your term policy that you do not convert can be sold. You pay no further premiums and receive cash now. This is a very valuable option that should be considered before cancelling. We have clients who receive tens or hundreds of thousands of dollars for their policies (see examples below).
Selling policy examples:
Gender | Male | Female |
Age | 72 | 68 |
Policy Type | Term Life | Term Life |
Health Concerns | Major health conditions | Minor health conditions |
Policy Benefit | $500,000 | $600,000 |
Cash Offer Amount | $52,000 | $28,000 |
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Getting Your Policy Appraised
The most important question becomes, how much can you receive for your policy?
We specialize in obtaining the highest offers for life insurance policies. This means the most competitive offer, which requires an effective process. Our proprietary technology allows us to connect with all the major buyers (as well as end funds that often make the highest offers).
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Keeping vs. Converting
Conversion premiums are higher than the original term policy premiums. However, keeping a policy as an annual renewable term will result in premiums significantly higher over time.
Conversion premium examples:
Gender | Male | Female |
Age | 72 | 68 |
Insurance Carrier | Principal | Principal |
Rating Class | Preferred Non-Smoker | Standard Non-Smoker |
Policy Benefit | $500,000 | $100,000 |
Term Premium | $1,351 (annually) | $187 (annually) |
Conversion Premium | $19,272 (annually)* | $3,352 (annually)* |
*Conversion premiums were last calculated on 3/29/2022 and may vary. We can run current conversion quotes for your policy.
Worth Higher Premium?
The next question becomes, is the higher premium worth it?
If your health is still good, you can often purchase a new policy that locks in a new level premium that costs less than the annual renewable term. Typically, the need for life insurance change and we recommend considering lower policy amounts. We can compare new policy quotes vs. converting with you.
In some cases, the insured's health has declined since the term policy was purchased and the increased premium can be worth it. We can help determine if you could qualify for a new policy and compare options.
Selling Your Term Policy
When considering higher conversion premiums, it often makes sense to convert only part of the term policy, or none at all. In these cases, you can sell the policy amount you are letting go. When compared to the alternative of cancelling a term policy, receiving a cash offer is an extremely valuable option.
Principal Financial Group
Permanent Policy Options
Keep Policy
If your permanent life policy (universal life or whole life) is still what you need, and premiums are not a burden, your best option can be to keep the policy. There may be options to reduce the premiums you are paying by running alternative in-force illustrations or using policy cash value to cover premiums.
Reduce Policy
When your need for life insurance has decreased, you may consider reducing the face amount of the policy. This will provide you with a benefit amount that serves you better now and reduces your premiums.
Sell Policy
When premium dollars could be better used in other ways and your need for life insurance has changed, you may consider selling your policy. You pay no further premiums and receive cash now. This is a very valuable option that should be considered before cancelling.