Selling your life insurance policy for cash is also known as life settlement. A life settlement is a financial transaction in which a life insurance policyholder sells their policy to a third party for a lump-sum cash payment.

The buyer becomes the policy's new owner and beneficiary, taking over premium payments and receiving the eventual benefit.

This option is often considered by individuals who no longer need or can afford their life insurance policy or who need funds for other purposes.

To qualify for a life settlement, the typical criteria include:

• Age and Health: Generally, policyholders are 65 years or older or have a serious health condition.
• Policy Type: Most types of life insurance policies, including universal, whole, and convertible term policies, are eligible.
• Policy Value: The policy usually has a death benefit of at least $100,000.

Your life insurance policy's value depends on multiple factors such as your health status, the amount of your insurance policy, the type of insurance policy, and your policy premiums.

Individuals who sell their life insurance policy to a third party usually receive significantly higher payouts than what they would receive from surrendering their policy back to their insurance company.