What are the requirements to sell a term life insurance policy?
Asked by: Jerrold Brown | Last update: July 6, 2025Score: 4.5/5 (15 votes)
How is it possible to sell a term life insurance policy?
You may have the option to sell a term life insurance policy to a third-party company. This process is known as a life insurance settlement. Selling your policy depends on several factors, such as the insurance company you chose, how much coverage you have, and whether your policy can be converted.
What are the qualifications to sell your life insurance policy?
The life insurance policy must have a face value of $100,000 or more. The life insurance policy must be transferable. Most types of life insurance policies can qualify if the sale is allowed by the original contract of the insurance carrier.
How much can you sell a $100,000 life insurance policy for?
Just like any other insurance policy, a life settlement payout for a $100,000 whole life policy would depend on your age, health condition, and policy premiums. A typical life settlement is worth around 20% of your policy value, but can range from 10-25%.
Is selling life insurance a good hustle?
In our opinion, it doesn't hurt that insurance is a lucrative business. You can gain commissions on the plans that you sell, so it's entirely up to you how much you want to hustle. You can also make more money with consistent renewals, so it pays in the long run to have loyal clients.
How can I sell my term life insurance policy?
Which insurance license makes the most money?
- Insurance Agent.
- Insurance Underwriter.
- Actuary.
- Personal Finance Advisors.
- Claims Adjusters, Appraisers, Examiners, and Investigators.
Can you cash out a term life insurance policy?
Term life is designed to cover you for a specified period (say 10, 15 or 20 years) and then end. Because the number of years it covers are limited, it generally costs less than whole life policies. But term life policies typically don't build cash value. So, you can't cash out term life insurance.
Is life insurance the hardest thing to sell?
Life insurance is a very difficult product to sell. Simply getting your prospect to acknowledge and discuss the fact they are going to die is a hard first step. When and if you clear that hurdle, your next task is creating urgency so they buy right away.
What is the highest paying insurance to sell?
Life Insurance Policies
Financial Rewards: Selling life insurance can be highly lucrative, often offering substantial commissions. Emotional Fulfillment: Life insurance agents provide crucial support during clients' major life events, building meaningful relationships.
What is the downside of selling your life insurance policy?
Not all proceeds received from the sale of your life insurance policy are tax-free. It is important to know that the proceeds you receive from a life settlement may be accessible by your creditors.
Can a term life insurance policy be converted to whole life?
With most insurers, you can typically convert without taking another medical exam or answering health questions, as long as you do so within a certain time frame or by a certain age, such as 75. The deadline for converting and the type of permanent policies available depend on the life insurance company.
How do I learn to sell life insurance?
You'll need to complete your state's pre-licensing education requirements, pass an insurance licensing exam, apply for a license with your state, receive a National Producer Number (NPN), and then either find a job with a life insurance company or start your own.
Who qualifies to sell their life insurance policy?
Own a policy with a $100,000 or more in death benefit – anything less than that typically does not qualify, unless there are considerable health impairments. Life insurance policies generally qualify if you are over age 70.
Does term life insurance have any value?
While term life insurance can be a useful policy for many people, it doesn't build cash value. With this type of policy, you pay for a potential death benefit payout that your beneficiaries will receive if you pass away before the end of its term.
What are the tax consequences of cashing in a life insurance policy?
Cashing out your policy
You're able to withdraw up to the amount of the total premiums you've paid into the policy without paying taxes. But if you withdraw on any gains, such as dividends, you can expect them to be taxed as ordinary income.
How fast can you make money selling life insurance?
Most businesses don't make any profit in their first year of operating. It could take anywhere from 18 to 24 months for your insurance sales to actually provide profit. Don't feel discouraged. Every small business owner has to clear this hurdle.
Why do most life insurance agents fail?
The most commonly cited reason insurance agents fail is that they fail to listen to their customers and take the time to find the best product to suit their needs. Agents who bring the right solutions to customers build trust, and that helps them build a book of loyal customers.
What is the cash value of a $100,000 life insurance policy?
Example: $100,000 Life Insurance Policy
The amount of money you're offered will vary based on your age and health. If you are older, then you may be able to get a significant chunk of money. A company may offer you a payout in the range of $10,000 to $30,000, but this can vary from policy to policy.
How can I sell my term life insurance policy?
You can sell a term life insurance policy for cash through a life settlement, but your policy will usually have much more value on the market if it is the type that can be converted to a whole or universal life policy. The provision in a term life policy that allows for this change is called a conversion rider.
Can I borrow money against my term life insurance?
Life insurance loans are only available on permanent life insurance policies — such as whole life and universal life — that have a cash value component. You likely can't borrow against a term life insurance policy since it probably doesn't have cash value. Learn more about term vs. whole life insurance.
What is the most lucrative type of insurance to sell?
While there are many kinds of insurance (ranging from auto insurance to health insurance), the most lucrative career in the insurance field is for those selling life insurance.
Which insurance license is hardest to get?
Each insurance licensing exam presents its own challenge. Between Life and Health, students say that the Health insurance exam is the more difficult. Health insurance policies are simply more complicated than life insurance policies. The Property insurance exam is easier than the Casualty insurance exam.
Can I become a millionaire selling insurance?
If you have a great work ethic and are willing to place yourself out there to establish relationships with clients, you will get more opportunities to earn a higher income. Selling insurance may even make you a millionaire.