Sell Your Life Insurance Policy in California | 2026 Life Settlement Guide

You may be paying premiums on a life insurance policy you no longer need, or you may prefer liquidity today instead of continuing coverage. Many California policyholders are surprised to learn that a life insurance policy can be sold on the secondary market, within the context of a life settlement transaction, often for several multiples of the cash surrender value.

California is widely considered one of the largest and most active life settlement markets in the United States. A large senior population, many substantial policies, and clear legal guidelines contribute to strong buyer competition for qualifying policies.

This guide explains how life settlements work in California, what the law requires, and what you can expect during the process.

Is It Legal to Sell My Life Insurance in California?

Yes. Life settlements have been legal and regulated in California since 2009.

The California Department of Insurance (CDI) oversees all of the life settlement industry activity in California. Life settlement brokers and providers must be licensed and comply with strict requirements for disclosures and consumer protections.

California requires that life settlement providers give you a written disclosure explaining, amongst other things:

• How your policy is being evaluated
• Whether fees or commissions apply
• What alternatives you may have
• Your right to rescind the transaction

You also have a mandatory rescission period: you may cancel the transaction within 30 days after signing all documents, or 15 days after receiving the funds, whichever is earlier.

Who Buys Life Insurance Policies in California?

Most buyers in the California life settlement market are institutional investors. These buyers buy through licensed providers, who have a provider's license in California to acquire life insurance policies via the settlement process:

• Life settlement investment funds
• Pension funds
• Family offices
• Private equity firms
• Specialized alternative-asset managers

These buyers purchase policies as part of large, diversified portfolios. When you sell- the life settlement process works like this:

• You receive a lump sum payment
• The buyer becomes the new owner
• The buyer pays future premium payments
• The buyer eventually collects the face value of death benefit

California is attractive to buyers for several reasons:

• It has the largest senior population in the country
• Many residents hold sizable policies
• Providers are familiar with California's regulatory environment

You may work with any life settlement provider that holds a valid California license.

How Much Is My Policy Worth in California?

Life settlement value depends on:

• Age
• Health history
• Policy type
• Policy size
• Premium requirements
• Insurance carrier rating

If you are over 65, have at least $100,000 in coverage, and your health has changed since you bought the policy, offers often fall in the range of 10–60 percent of the death benefit.

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

$2,000,000 universal life policy, age 75 year old female with multiple impairments

• Surrender value: $14,000
• Settlement offer: $290,000

$1.5 million universal life policy, age 88 year old male with relatively healthy prognosis

• Surrender value: $26,000
• Settlement offer: $375,000

$300,000 convertible term policy, age 74 male, terminally ill and a cancer survivor

• Surrender value: $0
• Settlement offer: $128,000

California's competitive environment often results in multiple bids for strong policies.

Retained Death Benefit in California

A Retained Death Benefit (RDB) is an agreement where a policyholder sells their life insurance policy but keeps a guaranteed portion of the death benefit for their beneficiaries, with the buyer assuming all future premium costs. California regulations mandate that the buyer must provide at least 30 days' notice before a policy lapses and offer the owner the chance to keep the coverage by paying the premiums themselves. If the owner declines this option and the policy subsequently terminates due to the provider's non-payment, the provider is legally required to pay the owner the full value of the death benefit their beneficiary would have received at maturity. These strict liability requirements and the potential for a full death benefit penalty make RDB deals significantly less prevalent in California compared to other states.

Why California Residents Should Work With a Licensed Provider

California maintains an official directory of licensed life settlement providers. Each listing includes the required California company code, which begins with the letter "L."

Licensed providers must comply with:

• Mandatory disclosures
• Use of approved forms
• Consumer review periods
• Strict rules governing conduct
• Ongoing regulatory oversight

If you evaluate or sell your policy through our platform, all regulated life settlement activities are facilitated through our licensed affiliate in full compliance with California law.

How the Process Actually Works

Most transactions take 60–90 days from start to finish.

Why People Sell

Common motivations include:

• Estate or business planning changes
• Premiums becoming burdensome
• Desire for liquidity in retirement
• Changing health or financial needs
• Preference for cash today rather than a future benefit

A life insurance policy is an asset. Selling it may be appropriate when the present-day value is more meaningful than future coverage.

California Market Realities

California's life settlement market reflects:

• High volume of eligible seniors
• Larger-than-average policy sizes
• Clear regulations and consumer protections
• Strong buyer competition
• Slightly higher life expectancy, factored into pricing

Even with longer life expectancy assumptions, California policies typically remain attractive to institutional buyers.

Next Steps

If you're considering selling your life insurance policy in California, here's how to get started:

Check your eligibility

Review your age, health status, policy type, and face amount to determine if you may qualify.

Get a personalized estimate

Use our valuation calculator to understand your policy's potential value.

Gather your documents

Request your policy documents and authorize medical records retrieval to speed up the underwriting process.

Review offers carefully

Compare offers from licensed providers and review all disclosures before making an informed decision.

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.