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

Life insurance is something people buy with a purpose. Years later, that purpose can change. Loved ones become independent and beneficiaries have different needs. Estate planning needs change, premium payments begin to feel heavy, the life insurance coverage no longer fits, or the cash surrender value means more to you today than a future death benefit. And lets not mention those medical bills. Yikes. Massachusetts allows policyowners to sell their life insurance policy to a licensed life settlement provider, generally for a lump sum, one-time payout. The state regulates who can be involved, how the life settlement contract must be structured and what disclosures must be given to the policyholder.

Massachusetts regulates life settlements with standards for licensing, training, disclosures, rescission, escrow and the waiting period tied to when the policy was issued. These rules exist so that if you decide to sell your policy you can do it with clarity.

Is It Legal to Sell My Life Insurance in Massachusetts?

Yes. Life settlements are legal and regulated. Only licensed life settlement providers and properly registered viatical brokers are allowed to negotiate or effectuate these transactions with Massachusetts residents.

The Massachusetts Division of Insurance oversees the licensing and regulation of life settlement providers and brokers operating in the state.

Licensing Requirements in Massachusetts

Life settlement providers and dedicated life settlement brokers must hold a license from the state of Massachusetts Division of Insurance.

The law allows licensed attorneys, certified public accountants and accredited financial planners to negotiate a life settlement contract for the owner without a separate life settlement broker license if they are acting in their regular professional capacity representing the owner and are not compensated by the buyer side of the transaction.

A person specifically licensed as a life settlement broker must complete fifteen hours of life settlement training every two years. This requirement does not apply to a licensed life insurance producer who is acting as a life settlement broker.

How Much Is My Policy Worth in Massachusetts?

Massachusetts does not set a statutory formula for pricing. Value is driven by the insured's age and health impairments, projected life expectancy, future premium payment obligations and the structure and type of policy (permanent life insurance is different from a term life insurance policy).

The minimum value offered in a life settlement must be greater than the policy's cash surrender value. This ensures policyowners receive more than they would by simply surrendering the policy to the insurance company.

To give a frame of reference these examples reflect typical market behavior.

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

Example One

• Two million dollar universal life policy
• Insured age seventy seven with moderate COPD and hypertension
• Surrender value: sixteen thousand
• Settlement offer: three hundred twenty thousand

Example Two

• One million five hundred thousand dollar whole life policy
• Insured age eighty two with limited mobility
• Surrender value: forty thousand
• Settlement offer: two hundred fifty thousand

Example Three

• Three hundred thousand dollar convertible term policy
• Insured age seventy one, history of melanoma, converted within the required deadline
• Surrender value: zero
• Settlement offer: one hundred ten thousand

Massachusetts Two Year Waiting Rule

Massachusetts does not allow life settlements during the first two years after the policy was issued except in specific documented situations. These exceptions include terminal or chronic illness, divorce, death of a spouse, retirement, disability, bankruptcy and other significant changes in circumstances.

Once the period of time has elapsed, the waiting restriction ends and a settlement can proceed as long as other requirements are met.

Wondering what your policy might be worth in Massachusetts?

Consumer Protections and Required Disclosures

Massachusetts requires life settlement providers and brokers to give the owner clear disclosures before signing. These disclosures must describe alternatives to a life settlement, possible tax implications, creditor considerations and whether the broker represents the policyowner exclusively or may have relationships with a provider.

The contract must include a witnessed document confirming that the owner understands the life settlement transaction, the policy benefits and that the decision to sell is voluntary.

Massachusetts Rescission Period and Escrow

Massachusetts provides a clear rescission right. You may rescind the contract within fifteen days after it has been executed by all parties if you return the settlement proceeds along with any life insurance premiums, loans or loan interest the provider paid on the policy. If the insured dies during this period the contract is treated as rescinded if the proceeds and related amounts are repaid.

If the provider fails to give written notice of the right to rescind, the rescission period does not begin until written notice is actually provided.

After receiving signed transfer documents the provider must deposit settlement proceeds into a qualified escrow or trust account within three business days. The escrow agent must release proceeds to the owner within three business days after the insurer confirms the ownership change. If proceeds are not delivered by the date stated in the life settlement contract the owner may void the contract until payment is actually made.

How the Life Settlement Process Works in Massachusetts

1. Initial Review- A provider or broker reviews your policy issue date and basic qualifications.
2. Authorizations- You authorize release of medical records to understand health status medical history and life expectancy and life insurance company documents (like the original policy and up to date illustrations).
3. Underwriting- Underwriting is completed and a valuation is produced.
4. Offers and Disclosures- You receive offers, if relevant, along with all required disclosures.
5. Signing and Escrow- You sign contracts and the provider funds escrow while the insurer processes ownership and beneficiary changes.
6. Rescission Window- Your rescission window begins after full execution.

Most Massachusetts cases take between sixty and ninety days.

Next Steps for Massachusetts Policyowners

•Check the policy issue date and see whether the two year rule applies

•Gather recent policy statements and any available medical record summaries

•Speak with a licensed Massachusetts life settlement provider or broker and request an initial valuation (consider using a life settlement calculator as well).

•Review all written disclosures, especially around alternatives and broker compensation. Consider speaking with a tax professional to see what the tax implications will be if you settle your policy.

•Pay attention to the rescission language and dates in the contract

A life insurance policy is an asset. Massachusetts law is set up so that if you decide to sell it you can do it with clarity allowing you to make 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.