Sell Your Life Insurance Policy in New York | 2026 Life Settlement Guide

You may own a life insurance policy that no longer fits your needs. Premiums increase, financial priorities shift (your loved ones are finally independent), your beneficiaries don't need the cash payment anymore or the original purpose of the coverage no longer applies. What many New Yorkers do not realize is that a life insurance policy is an asset that can be sold on the secondary market through a life settlement transaction, often for a lump-sum cash that is significantly more than the surrender value offered by the insurer.

New York is one of the most heavily regulated life settlement jurisdictions in the country. This works to the advantage of sellers. The New York Department of Financial Services (DFS) oversees licensing, disclosure rules, and financial safeguards that ensure a transparent and legitimate process for the New York life settlement industry. If your policy qualifies, selling it is legal, structured, and worth considering.

Here is how the life settlement process works in New York.

Is It Legal to Sell My Life Insurance in New York?

Yes. Life settlements are fully regulated in New York. Companies that purchase policies must hold an active license issued by the Department of Financial Services (DFS).

New York law requires clear disclosures about many things, including explaining how an offer was calculated, what alternatives exist, and what fees apply.

Two-Year Holding Period

New York requires that a life insurance policy be in force for at least two years before it can be sold through a life settlement. This waiting period is designed to prevent policies from being purchased solely for speculative resale. Exceptions may apply in cases of terminal illness, chronic illness, or other qualifying circumstances.

15-Day Rescission Period

New York mandates a 15-day rescission period after you receive settlement funds. If you change your mind during that time, you may return the proceeds and reclaim your policy with no penalty.

Three Business Day Escrow Funding

Within three business days after receipt from the owner of documents to effect the transfer of the policy that is the subject of a life settlement contract, the life settlement provider shall deposit the proceeds of the life settlement contract into an escrow or trust account in a state or federally chartered financial institution. The escrow agent or trustee shall be required to transfer the proceeds due to the owner within three business days of acknowledgement of the transfer from the insurer.

Who Actually Buys Life Insurance Policies in New York?

Buyers in New York are institutional investors such as pension funds, specialized life settlement funds, private equity firms, and family offices, all of whom acquire policies via licensed life settlement providers. These buyers use actuarial modeling to project outcomes across diversified portfolios.

You receive a lump sum payment today. The buyer becomes the policy owner, takes over future premium payments and eventually collects the death benefit from the life insurance company. For you, the policy becomes liquidity rather than a long-term expense.

New York is a strong life settlement market due to:

• A large number of policies originally purchased for estate or business planning
• A significant population over age 65
• A regulatory environment that enforces documentation standards and builds buyer confidence

Any DFS-licensed provider may purchase your policy, even if the company is headquartered outside New York.

How Much Is My Policy Worth in New York?

Your policy's value depends on factors such as age, health impairments, type of life insurance policy (permanent life insurance policies are different than term), premium obligations, face value and carrier strength. For qualifying New Yorkers over 65 with policies above 100,000 dollars and some decline in health, offers often fall between 10 and 60 percent of the death benefit.

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

$2,200,000 universal life policy, age 77 year old female with diabetes and mild COPD

• Cash Surrender value: $15,500
• Settlement offer: $315,000

$1.6 million universal life insurance policy, age 88 year old male with reduced mobility but otherwise stable health

• Cash Surrender value: $27,500
• Settlement offer: $398,000

$320,000 convertible term life insurance policy, age 72 male, cancer survivor in long-term remission

• Cash Surrender value: $0
• Settlement offer: $136,000

New York-specific considerations:

• Many policies are issued by highly rated carriers such as New York Life, Guardian, Northwestern Mutual, and MetLife.
• Strong regulation ensures accurate documentation and reliable contracts.

Retained death benefit arrangements, where sellers keep a portion of the death benefit, are available in some states. In New York, these structures are less common due to regulatory requirements.

A personalized estimate can be generated using our valuation calculator.

Why New York Residents Should Work With a Licensed Provider

Only companies holding an active life settlement provider license may legally buy your policy in New York.

Working with a licensed provider ensures:

• Full compliance with New York insurance regulations
• Written disclosure of pricing methods, alternatives, and fees
• Financial safeguards and regulatory oversight
• Proper handling of medical and personal data

How the Process Works in New York

Typical timeline: 60 to 90 days, depending largely on medical record retrieval.

Why People Sell in New York

Common reasons include shifting estate planning needs, premium burdens in retirement, desire for liquidity, eliminating no-longer-needed business coverage, and medical or financial planning considerations.

A life insurance policy is an asset. Selling it can make financial sense when its cash value today is more useful than its long-term death benefit.

Next Steps

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

1. Check your eligibility
2. Review your age, health status, policy type, and face amount to determine if you may qualify.
3. Get a personalized estimate
4. Use our valuation calculator to understand your policy's potential value.
5. Gather your documents
6. Request your policy documents and authorize medical records retrieval to speed up the underwriting process.
7. Review offers carefully
8. Compare offers from licensed providers and review all disclosures before making a 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.