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

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

Ohio has a well-established life settlement market with clear regulations that protect consumers while ensuring fair transactions. The state's large senior population and many substantial policies contribute to active buyer interest for qualifying policies.

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

Is It Legal to Sell My Life Insurance in Ohio?

Yes. Life settlements are legal and regulated in Ohio under the Viatical Settlements Act, codified in Ohio Revised Code Chapter 3916.

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

Ohio law requires that life settlement providers give you written disclosures explaining:

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

Important: Ohio has a 5-year waiting period for life settlements. This means you, as the policy owner generally must have owned your policy for at least five years before you have the eligibility to sell it.

Exceptions to the 5-year rule may apply if:

• You are terminally or chronically ill
• Your spouse has died
• You are divorced
• You have retired
• You have become disabled
• You declared bankruptcy

You also have a mandatory rescission period allowing you to cancel the transaction within a specified window after signing.

Who Buys Life Insurance Policies in Ohio?

Most buyers in the Ohio life settlement market are institutional investors. These buyers purchase through licensed providers who are authorized 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:

• You receive a lump sum payment
• The buyer becomes the new owner
• The buyer makes future premium payments
• The buyer eventually collects the death benefit upon the death of the insured.

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

How Much Is My Policy Worth in Ohio?

Life settlement value depends on your health and policy information, including:

• Age
• Health status
• Policy type (term life insurance is different than universal life)
• Policy size / life insurance coverage amount
• Premium requirements
• Life insurance company 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 15–50 percent of the death benefit.

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

$1,500,000 universal life policy, age 78 male with heart disease history

• Surrender value: $18,000
• Settlement offer: $245,000

$800,000 whole life policy, age 82 female with diabetes and COPD

• Surrender value: $42,000
• Settlement offer: $168,000

$500,000 convertible term policy, age 71 male, cancer survivor

• Surrender value: $0
• Settlement offer: $87,000

Ohio's established market often results in competitive bids for strong policies.

Your Right to Rescind

Ohio law provides a 15-day rescission period after you sign a life settlement contract. During this window, you may cancel the transaction for any reason by returning the funds received.

This protection gives you time to reconsider after signing and ensures you are not locked into a decision before you are ready.

Escrow and Payment Timeline

In Ohio, proceeds from a life settlement must be deposited into an escrow account with an independent escrow agent. Once the insurance company acknowledges the change of ownership, funds are released to you within 3 business days.

This escrow requirement protects sellers by ensuring funds are secured before the ownership transfer is finalized.

Understanding Ohio's 5-Year Waiting Period

Ohio is one of several states that requires policyholders to wait five years from the date of policy issuance before selling through a life settlement. This rule is designed to prevent "stranger-originated life insurance" (STOLI) schemes.

The waiting period applies from the original issue date of the policy, not from when you became the owner if the policy was transferred to you.

However, you may still qualify before the 5-year mark if:

• Terminal illness: You have been diagnosed with a terminal condition
• Chronic illness: You have a qualifying chronic health condition
• Spouse's death: Your spouse has passed away since the policy was issued
• Divorce: You divorced since acquiring the policy
• Retirement: You retired from full-time employment
• Disability: You became physically or mentally disabled
• Bankruptcy: You filed for bankruptcy protection

If you're unsure whether your policy qualifies under an exception, a licensed provider can review your situation during the initial consultation.

Why Ohio Residents Should Work With a Licensed Provider

Ohio requires all life settlement providers and brokers to be licensed by the Ohio Department of Insurance.

Licensed providers must comply with:

• Mandatory disclosures to sellers
• Use of state-approved forms
• Consumer review and rescission periods
• Strict rules governing conduct
• Ongoing regulatory oversight

Ohio's regulatory framework follows the NAIC Viatical Settlements Model Act, which establishes license, disclosure, and financial-responsibility standards.

How the Process Actually Works

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

Why Ohio Residents Sell Life Insurance Policies

Common reasons include:

• Changed circumstances: Beneficiaries may no longer need the death benefit
• Premium burden: Premiums have become unaffordable on a fixed income
• Retirement funding: Cash is needed for retirement expenses
• Healthcare costs: Funds needed for medical bills or long-term care
• Estate planning: Simplifying estate or business succession plans
• Better alternatives: Preferring cash now over future death benefit

Whatever your reason, a life settlement may provide significantly more than the policy's cash surrender value.

What to Do Next

Ohio policyholders interested in exploring a life settlement should first confirm their policy has been in force for at least five years, or that they qualify for one of the statutory exceptions. Gathering a recent policy statement and any relevant health documentation will help expedite any review process.

Working with a licensed provider ensures access to required disclosures, competitive offers from institutional buyers, and the consumer protections mandated under Ohio law.

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.