Sell Your Life Insurance Policy in Alaska | 2026 Viatical and Life Settlements Guide

A life insurance policy usually starts as protection for family, business or estate planning. Over time the picture changes. Premiums grow heavier, needs shift and the policy can start to feel like a stranded asset rather than a tool you actively use.

Alaska has a full viatical settlement framework that in practice governs what most people call life settlements. These rules cover licensing, disclosures, payments, escrow, privacy, contact limits and what counts as a fair offer to a policy seller.

If you sell a policy in Alaska you are not winging it under general contract law. You are operating inside a fairly tight regulatory box.

Is It Legal to Sell My Life Insurance in Alaska?

Yes. Alaska expressly recognizes viatical settlement transactions and gives the Division of Insurance authority over them. The state has adopted rules to protect viators, insureds and insurers.

In short, selling a policy through a viatical or life settlement in Alaska is legal, but only through licensed players who follow these rules.

Who You Deal With in Alaska

On the seller side Alaska uses three defined roles:

Viatical settlement provider: The legal buyer of your policy. The provider becomes the new owner and beneficiary and must be licensed with the Alaska Division of Insurance.

Viatical settlement broker: The person or firm that represents you, the policyowner, and negotiates with providers. Brokers must be licensed and must disclose their compensation and any conflicts.

Viatical settlement representative: An individual acting on behalf of a licensed provider or broker who also must meet qualification and appointment rules.

Appendix A to Alaska's disclosure regulation tells consumers in plain language that anyone arranging a viatical settlement for you must be licensed by the Alaska Division of Insurance.

Safety Concerns And The Hitman Question

Every once in a while someone asks the blunt question. If I sell my policy to a fund that gets paid when I die, does that put a target on my back?

It is a natural worry, but it does not line up with how this market actually works. For a deeper look at why this concern is unfounded, see our article on the "hitman" question.

Real buyers are regulated institutions. Think pension funds, asset managers, specialist life settlement funds, and family offices that live under compliance, audits and regulators. They buy large pools of policies, not one or two bets on a single person. Your policy is a tiny piece of a diversified portfolio. No one is sitting in a room watching your file and waiting for news.

More importantly, crime would completely destroy the investment. If someone were foolish enough to try something like that, the claim would be frozen, law enforcement would be involved, and the policy would become radioactive. The buyer would lose their capital, their license and their business, and the people involved would be looking at serious prison time. That is the exact opposite of what professional investors want.

There are plenty of real risks in life. Selling a policy through a regulated life settlement process does not meaningfully change your exposure to violent crime. The buyer wants a clean, boring actuarial outcome, not drama. If this were a real world problem you would see patterns of cases and headlines over the last few decades. You do not, because serious firms do not play games with that line.

If this worry is on your mind, it is better to treat it as something to acknowledge and then put aside, not as a deciding factor in whether to explore a settlement.

Retained Death Benefit And What Happens If The Buyer Stops Paying

In some transactions you do not sell the entire policy. Instead, you take part in cash today and keep a slice of the future death benefit. That structure is usually called a retained death benefit. The buyer agrees to carry the full premium load and, when the insured passes away, your family gets the retained portion without ever having to write another check.

The obvious follow up question is what happens if the fund or buyer stops paying premiums in ten years. If the policy lapses, your retained benefit disappears with it. That is a real risk, and it belongs in the contract, not swept under the rug.

Well structured deals handle this with clear protections. Common approaches include giving you the right to step in and assume the policy if premiums are not paid on time, or if the fund winds down or fails. In practice that can mean a clause that says if premiums are not funded by a certain date, ownership can revert or you can elect to take over and keep the policy in force by paying premiums yourself. Serious buyers also use professional servicing companies and advance notice requirements so you, your adviser, or your lawyer get notified long before coverage is at risk.

The point is that you do not have to simply hope the fund behaves. You can ask, in plain language, what happens if premiums are not paid, when you are notified, and what your rights are to step back in. If you are doing any kind of retained death benefit, those answers should be written into the settlement documents before you sign, so your family is not relying on a handshake twenty years from now.

Wondering what your policy might be worth in Alaska?

How Much Is My Policy Worth in Alaska?

Alaska does not publish an official price table. It does something more targeted. For insureds with serious illness and life expectancy of twenty four months or less, the regulation defines a set of minimum payout percentages as a benchmark for what is considered reasonable. Those percentages apply to face amount net of loans.

Minimum Payout Requirements by Life Expectancy:

• Under 6 months: At least 80% of face value after subtracting loans
• 6 to less than 12 months: At least 70%
• 12 to less than 18 months: At least 65%
• 18 to less than 24 months: At least 60%

The director can approve lower numbers in special circumstances, but this grid is the default frame for viatical level cases. For longer life expectancy senior cases the grid does not apply directly, but there is still a general rule that payments may not be unreasonable or unjust.

Example Settlement Scenarios

Illustrative examples; may not reflect the value of your policy.

Example 1

• $2,000,000 universal life policy
• Insured age 78 with advanced heart disease and life expectancy under 12 months
• Surrender value: $18,000
• Settlement offer: ~$1,420,000

This sits at roughly 71% of face so it clears the 70% minimum for that life expectancy band.

Example 2

• $1,000,000 whole life policy
• Insured age 83 female with estimated life expectancy between 18 and 24 months
• Surrender value: $35,000
• Settlement offer: ~$630,000

This is about 63% of face, above the 60% minimum.

Example 3

• $400,000 universal life policy
• Insured age 74 with expected life expectancy in the 3-5 year range
• Surrender value: $0
• Settlement offer: $120,000

Here there is no specific regulatory grid, so the price reflects general market behavior rather than a hard minimum.

Escrow and Payment Timing

Alaska is specific about how and when you get paid. Once the provider receives the properly executed transfer documents, it must pay the full settlement amount into an independent escrow or trust account at an FDIC insured institution.

The escrow agreement must say that you, the viator, receive the proceeds promptly after the provider receives written acknowledgment from the insurer that the ownership and beneficiary changes have been recorded.

Neither the provider nor the escrow agent may retain any portion of those proceeds. Every dollar funded as part of the settlement is for you. In practice, once the carrier confirms the change, money moves quickly.

Your Right to Rescind

Alaska builds a rescission right directly into the disclosure requirements. The disclosure you sign must state that you have the right to rescind the viatical settlement contract within fifteen days after receiving the settlement proceeds, provided you return the money.

You can change your mind within fifteen days after you get paid if you send all of it back. If the insured dies during that window, the contract is treated as rescinded if the proceeds are returned within the required time.

This is not optional language. Providers and brokers working in Alaska have to wire this into their contracts and closing packages.

Disclosures, Privacy and Contact Limits

Alaska requires a separate written disclosure document at or before application. That document must cover at least:

• Alternatives to selling the policy, such as loans, accelerated death benefits or policy changes
• Possible tax treatment, with a recommendation to talk to a tax advisor
• Possible effect on Medicaid and other government benefits
• Possible creditor exposure
• The fact that future owners of the policy will receive medical and identifying information
• The name and role of the escrow agent
• Broker compensation and any affiliations with the provider
• The rescission right and how it works
• How often the insured may be contacted for health updates

On privacy, providers and brokers must keep medical and personal data confidential except where disclosure is necessary to execute the settlement or is requested by regulators as part of supervision.

Contact frequency is capped. After the sale, the insured may be contacted no more than once every three months if life expectancy is more than one year and no more than once per month if life expectancy is one year or less.

How Alaska Treats the Investor Side

On the other side of the table, viatical settlement interests are treated as securities under Alaska law. The investor side of the transaction falls under the state securities code, while the contract between viator and provider is under the Division of Insurance.

For a policyowner this mostly shows up as additional paperwork and suitability questions if your policy is being sold into a structure that involves multiple investors.

How the Viatical and Life Settlement Process Works in Alaska

The Division of Insurance breaks the consumer story into phases, and it maps neatly onto what you see in the market.

Phase One

You speak with a licensed provider or broker and give basic information about your policy, your health and your goals. You sign authorizations so they can order medical records and policy details.

Phase Two

The provider underwrites the file. They review health records, carrier ratings, premium projections and whether the viatical minimum grid applies. They then calculate a range of possible offers.

Phase Three

If you like the range, you receive a settlement contract and related forms. You see a separate disclosure document covering alternatives, tax and benefits considerations, broker compensation, privacy, escrow and rescission. You sign the contract and change forms. The provider signs and sends the change forms to the insurer.

Phase Four

Once the insurer confirms that ownership and beneficiary changes are on record, the provider instructs escrow to release the funds. You receive the money, and from that payment date you have fifteen days to rescind if you decide the sale is not right for you.

From start to finish, most Alaska transactions live in the sixty to ninety day range, driven largely by medical record response times and insurer processing.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal, financial, or professional advice. Life settlement regulations vary by state, and this content should not be relied upon as a substitute for consultation with a licensed professional. Please consult with a qualified attorney, financial advisor, or licensed life settlement broker before making any decisions regarding the sale of a life insurance policy.