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

You bought a life insurance policy years ago to solve a problem at the time. Maybe it was estate taxes, business planning, or basic family protection. Now the picture is different. Premiums feel heavy, the original need is gone, or you simply prefer cash in hand over a large future payout.

Louisiana does allow you to sell a life insurance policy, but the state does it under the label "viatical settlements." In Louisiana law, what most people call life settlements is folded into that viatical framework, and the whole business is overseen by the Louisiana Department of Insurance.

If your policy qualifies, a sale can produce far more than the surrender value, and multiples of what you would get by just walking away and letting the policy lapse.

Is it legal to sell my life insurance policy in Louisiana

Yes. Selling a life insurance policy is legal, and it is regulated.

Louisiana's viatical settlement statutes set the ground rules. They define viatical settlement contracts broadly to include the sale of a life policy for less than the death benefit in exchange for transferring ownership or the beneficiary.

The Department of Insurance makes it explicit that what the market usually calls "life settlements" is treated as viatical settlement business in Louisiana, and there is no separate license track for "life settlement only" players.

So in practice:

• Policyowners can sell policies.
• Transactions must run through licensed viatical settlement providers and brokers.
• The Louisiana Department of Insurance regulates those providers and sets disclosure and escrow rules.

You do not sell directly to a hedge fund or private equity platform. You deal with a licensed provider. The institutional capital sits behind that provider.

How long must my policy be in force before I can sell it

Louisiana has a two year waiting period.

As a general rule, it is a violation of the statute to enter into a viatical settlement contract in the first two years after a policy is issued.

There are exceptions where a younger policy can still be sold:

• The viator or insured is terminally or chronically ill.
• A court of competent jurisdiction has entered a final order, judgment, or decree adjudicating the viator bankrupt or insolvent, or approving a petition seeking reorganization of the viator, or appointing a receiver, trustee, or liquidator to all or a substantial part of the viator's assets.

The point is simple. Most standard senior cases will sit in the policy for at least two policy years before a sale, but the statute leaves room when life takes a sharp turn.

How much is my policy worth in Louisiana

Pricing is case by case, but there are some patterns.

For typical senior life settlements in Louisiana, qualifying policies often trade somewhere between roughly ten and sixty percent of the death benefit. The exact number depends on age, health, premium load, carrier, product design, and any riders. Industry references show that in regulated markets, discounts tighten as life expectancy shortens and premium efficiency improves.

Here are three example deal profiles that are directionally consistent with current market behavior. These are illustrations, not offers:

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

Two million dollar universal life policy

• Age eighty Louisiana resident, significant cardiac history and moderate functional limitations
• Surrender value about twenty one thousand dollars
• Settlement offer about eight hundred thousand dollars
• This is about forty percent of the face amount.

One million two hundred thousand dollar guaranteed universal life policy

• Age seventy six male, controlled diabetes and prior stent, still independent in daily life
• Surrender value about thirty five thousand dollars
• Settlement offer about three hundred sixty thousand dollars
• This is about thirty percent of the face amount.

Four hundred thousand dollar convertible term policy

• Age seventy two female, cancer survivor now several years out of treatment
• Term converted to permanent before sale
• Surrender value zero
• Settlement offer about one hundred forty thousand dollars
• This is about thirty five percent of the face amount.

Louisiana's legal framework does not force buyers to a fixed percentage. It makes sure you have a regulated process, disclosures, and rescission rights. The actual bid comes from the math on your specific case.

What types of policies qualify in Louisiana

In practice, buyers in Louisiana focus on the same usual suspects seen nationally:

• Universal life and guaranteed universal life with stable premium schedules.
• Whole life policies issued by mainstream carriers.
• Convertible term policies that can be turned into permanent coverage before or as part of the transaction.
• Some survivorship policies and certain large group conversions, on a case by case basis.

Plain term policies that are not convertible almost never qualify because there is no long term asset for the buyer to own.

Who actually buys policies in Louisiana

The capital behind these transactions comes from:

• Dedicated life settlement funds.
• Insurance linked investment platforms.
• Pension and endowment allocations to longevity strategies.
• Family offices and other institutional investors.

Under Louisiana law, you do not sign a contract directly with those end investors. You contract with a licensed viatical settlement provider. The Department of Insurance confirms that what the market calls life settlements is handled through viatical settlement licensing, both for providers and for producers acting as brokers.

So the real practical rule is:

• A Louisiana licensed viatical settlement provider is your counterparty.
• A Louisiana licensed viatical settlement broker, or a properly notified life producer acting as a broker, can represent you and run a competitive bidding process.

How the process works in Louisiana

The mechanics look roughly like this.

Initial screening

You or your advisor share basic information about age, health summary, carrier, product type, death benefit, and premiums. The provider or broker decides whether the case is worth full underwriting.

Application and authorizations

You complete a viatical or life settlement application and sign medical and policy release forms. These allow the provider and broker to order records from your doctors and from the insurance company.

Underwriting and valuation

The provider builds a life expectancy estimate using medical records and actuarial tools, and runs detailed premium projections on the policy. Louisiana's general rules require the provider to have a physician certify that the viator is of sound mind and not under undue influence if the viator is also the insured.

Offers

If a broker is representing you, multiple providers can bid. You will see a written offer stating the purchase price and key terms.

Escrow and closing

Louisiana law requires that settlement proceeds move through an independent escrow or trust account at an FDIC insured financial institution. The contract must name the escrow agent and give you the right to inspect the escrow arrangements. Once the provider receives written confirmation from the carrier that ownership and beneficiary changes are recorded, the provider must fund the escrow within three business days.

Payment and transfer

After escrow confirms all conditions are met, the funds are released to you and the policy is officially in the buyer's hands. Going forward, they pay premiums and they receive the death benefit.

Total timeline is often around sixty to ninety days, driven mostly by how fast medical records and carrier responses come back.

Rescission period and your right to change your mind

Louisiana gives you a clear cooling off period.

The statute requires that the disclosure document itself state that the viator has the right to rescind a viatical settlement contract for fifteen calendar days after receiving the settlement proceeds. If the insured dies during that window, the contract is treated as rescinded once all proceeds and any premiums advanced by the provider are repaid.

If the provider does not fund the deal within the time it disclosed, the contract is voidable by the viator until consideration is actually paid and accepted.

In plain language, money has to move promptly and you have a real, documented window to reverse the decision.

How Louisiana treats medical privacy and follow up

Louisiana's disclosure section spells out what happens with your information. The provider and broker must tell you that medical, financial, and personal data may be shared only as needed to complete the transaction and with buyers or financing entities behind the policy. You sign a consent for that, and by statute it can be renewed periodically.

They can check in on your health status after closing, but only within set limits tied to life expectancy. If life expectancy is more than one year, contact is capped at once every three months. If life expectancy is one year or less, contact is capped at once per month.

Practical next steps for a Louisiana policyowner

If you are holding a policy and want to see whether a Louisiana life or viatical settlement makes sense, the practical sequence looks like this:

• Confirm that your policy is at least two years old, or that you fall into one of the statutory exception categories.
• Gather the basics: in force illustration, premium notices, and a copy of the policy.
• Ask your advisor or broker whether the case is more of a traditional senior life settlement, a classic viatical case, or something in between.
• Work only with licensed viatical settlement providers and brokers who are on file with the Louisiana Department of Insurance.
• Make sure proceeds will flow through an independent escrow agent and that your contract clearly shows your fifteen day rescission right.

Your policy is an asset. Louisiana's framework is designed so that if you decide to sell it, you do it through a regulated channel with defined protections, rather than in the dark.

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.