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

You bought life insurance to solve a problem at a certain point in time. Maybe it was income replacement, estate planning, or a business need. Years later, the policy may not fit as well. Premiums feel heavy, needs have changed, and the policy shows up more as a line item than an asset.

In Montana, you do not have to surrender or lapse the policy and walk away. You can sell it to a licensed buyer through a regulated viatical or life settlement and turn it into cash. The capital usually comes from funds and other institutional investors, but the transaction itself runs through a licensed viatical settlement provider, often with a broker representing you.

This guide walks through how that process works in Montana, what the law does to protect you, and what real world deal economics often look like.

Is It Legal To Sell My Life Insurance Policy in Montana

Yes. Montana recognizes viatical and life settlement transactions and regulates them under its insurance code. The rules cover who can act as a viatical settlement provider or broker, what has to be in the contract, what must be disclosed to you, and how money moves at closing.

In practice that means:

• Only licensed viatical settlement providers are supposed to buy policies from Montana residents.
• Viatical settlement brokers who represent policyowners also need to be licensed, unless they fit into narrow professional exceptions.
• Contracts and disclosure forms follow state standards and can be reviewed by the state insurance regulator.

If someone wants to buy your policy and cannot show they are a licensed provider, or wants you to sign contracts that do not look like standard settlement forms, treat that as a warning sign.

Who Actually Buys Policies in Montana

There are two layers in every Montana settlement.

The regulated counterparty you see is the viatical settlement provider. That entity collects medical records and policy data, underwrites life expectancy, structures the deal, and signs the contract with you.

Behind the provider sit the capital sources. That is where you find life settlement funds, specialty managers, family offices, and other institutional investors that want exposure to mortality linked cash flows.

If you work with a broker, the broker represents you and brings your policy to multiple licensed providers, creating competition. Montana rules allow certain professionals, such as your attorney or CPA, to negotiate on your behalf in some situations as long as they are working for you and not being paid by the provider.

So you sell to a licensed provider. The provider and its capital partners own and manage the policy after closing.

How Much Might My Montana Policy Be Worth

Montana does not set a formula. Value is produced by underwriting.

The main drivers are:

• Age of the insured
• Health profile and life expectancy
• Policy type and structure
• Premiums required over time
• Carrier strength and product performance

For policies that qualify, it is common in regulated markets like Montana to see offers that are significantly higher than cash surrender value but lower than the full death benefit. A rough band many real cases fall into is ten to sixty percent of face amount, with serious health issues and efficient premiums at the higher end.

Wondering what your policy might be worth in Montana?

Examples that mirror current market patterns (illustrations, not offers)

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

Actual Montana bids move with every medical update and premium projection. The point is that for the right profile, the spread between surrender value and market value can be large.

How Long Do I Have To Own My Policy Before I Can Sell It in Montana

Montana uses a waiting rule to keep people from originating policies solely to flip them.

The basic idea is simple: In the normal case, you should expect to wait at least two years from the original policy issue date before a Montana provider will buy it in a regulated settlement.

Montana law lists specific exception situations that can open the door earlier, such as major changes in health or significant life events after issue. Those exceptions have to be documented and reviewed case by case.

Short version: If you bought a policy for genuine insurance needs and have held it for more than two years, you are usually past the waiting rule and can explore a regulated settlement. If something major changed in your health or life circumstances inside the first two years, a provider or your counsel can check whether you fit one of the statutory exceptions.

Montana Rescission Rights and Escrow Protections

Two protections matter a lot in a real transaction: your ability to change your mind for a short period, and the way money is handled at closing.

Rescission Right

Montana requires every viatical settlement contract to give the seller a clear rescission window. In practice that means:

• You have the right to cancel the contract for a limited time after signing and after receiving your funds.
• The outside edge of that window is the later of thirty days from the date all parties sign the contract or fifteen days after you receive the settlement proceeds.
• To rescind, you send notice within that time and return the money you received, so that ownership of the policy can move back to you.

If you exercise that right properly, the sale is unwound and you are back where you started, minus transaction friction.

Escrow and Timing of Funds

Montana also controls how funds move.

• After you sign the closing package, the provider has three business days to move the settlement amount into an escrow or trust account at an approved financial institution.
• The insurance company processes the ownership and beneficiary change and confirms that the policy has been transferred.
• Only after that confirmation does the escrow agent release funds to you.

If the provider does not fund the settlement as required, Montana law gives the regulator leverage and can lead to regulatory action or a voided contract. The goal is to keep you from being pushed to sign away your policy before real money is sitting in a protected account.

Other Montana Protections You Should Know About

Montana layers additional safeguards around these deals.

Licensing

Providers and brokers must be licensed and meet financial responsibility and reporting standards. The regulator can suspend or revoke licenses for misconduct.

Disclosures

Before you sign, the provider has to give you specific written disclosures, in a form the regulator can review. Those disclosures cover things like alternatives to a settlement, possible tax and benefit impacts, how and when you get paid, and your right to rescind.

Montana Minimum Payouts for Viatical Settlements

Montana sets minimum payout standards to ensure viators receive a reasonable return when selling a policy. These minimums apply based on the insured's health status and life expectancy.

Terminally Ill Insureds

When the insured is terminally ill, Montana requires the following minimum percentages of the net death benefit:

Insured's Life Expectancy

Minimum Percentage of Net Death Benefit

Non-Terminally and Non-Chronically Ill Insureds

If the insured is not terminally ill or chronically ill, the viator must receive at least the greater of the cash surrender value or accelerated death benefit of the policy.

Chronically Ill Insureds

If the insured is chronically ill but not terminally ill, the viator must receive at least 30% of the net death benefit.

Carrier Rating Adjustment

Except where the cash surrender value or accelerated death benefit is paid, the minimum percentage may be reduced by 5% for viaticating a policy where the insurer has an A.M. Best rating at or below a marginal rating.

Safety Concerns and The Hitman Question

A common concern people have when considering a life settlement is safety. The question often comes up: "If someone else owns my policy and benefits from my death, am I in danger?"

The short answer is no. The buyers in regulated life settlements are institutional investors—pension funds, university endowments, and specialty asset managers—not individuals. They manage portfolios of hundreds or thousands of policies and have no interest in or ability to affect individual outcomes. Their returns depend on actuarial averages across large pools, not on any single policy.

For a deeper look at this topic and the legal protections in place, see our article on safety concerns and the "hitman" question.

Retained Death Benefit and What Happens If The Buyer Stops Paying

In some life settlement transactions, sellers negotiate to keep a portion of the death benefit—known as a retained death benefit. This means when the insured passes away, a percentage of the payout goes to the seller's original beneficiaries while the rest goes to the buyer.

Another common concern is what happens if the buyer stops paying premiums. Standard settlement contracts include protections requiring the buyer to maintain the policy. If they fail to do so, the contract typically provides remedies including the policy reverting to the original owner.

Learn more about how these protections work in our detailed guide on retained death benefits and buyer payment obligations.

How The Montana Life Settlement Process Works

On the ground, a Montana case usually moves through the same sequence you see in other regulated states.

On the ground, a Montana case usually moves through the same sequence you see in other regulated states.