Selling a $1 Million Life Insurance Policy: What It's Worth

If you own a life insurance policy worth $1 million or more and you no longer need it, the question is simple: what is it actually worth if you sell it? The answer is that a policy this size sits right in the heart of the life settlement market, not at its edges. The average policy sold through a life settlement carries a face value between $1.3 million and $1.6 million, according to aggregated industry broker data. A million-dollar policy is not an outlier here. It is close to the average case.

This guide covers what policies from $1 million to $10 million and beyond typically sell for, why bigger faces draw more buyer competition, what changes once you cross about $5 million, and who tends to own policies this size in the first place.

What a $1 Million Policy Typically Sells For

Most life settlements pay the seller somewhere between 10 and 25 percent of the policy’s face value, according to industry data. The middle of the market sits around 20 percent, and the range can reach as high as 50 percent for older sellers in poorer health. On a $1 million policy, that typical band works out to roughly $100,000 to $250,000 in cash while you are still living.

Compare that to surrender. The cash surrender value an insurance company pays to take the policy back typically runs just 3 to 5 percent of face value, so the same $1 million policy might return only $30,000 to $50,000 from the carrier.

To put real numbers behind the gap: in 2025, the average life settlement paid sellers $212,066, nearly 9 times the $24,360 average cash surrender value, according to the Life Insurance Settlement Association’s 2025 Annual Market Data. Across 2,955 completed transactions, sellers received $626.6 million, about $554.6 million more than they would have received by surrendering.

For a closer look at how those averages break down on smaller policies, see our guide to the average life settlement offer. The rest of this article focuses on what happens at $1 million and above.

Typical Ranges From $1 Million to $10 Million

The table below shows typical ranges at the sourced percentages of face value. These are illustrative, not quotes. Shorter life expectancy pushes offers toward and past the top of each range, while heavy premium costs pull them lower.

Illustrative estimates only, based on typical percentages of face value from industry data. Actual offers depend on age, health, policy type, premium levels, and how many buyers bid. Individual results vary, and there is no guarantee any policy will receive an offer.

The pattern that matters is this: the dollar spread between a poor outcome and a strong one grows with the size of the policy. On a $10 million policy, the difference between 12 percent and 24 percent of face value is $1.2 million. That is why how you sell a large policy matters even more than it does on a small one.

Why Larger Policies Attract More Buyers, Not Fewer

A common worry among owners of large policies is that a seven-figure death benefit will be hard to sell, that buyers will balk at the size. The opposite is true.

Institutional buyers price a policy by weighing the future death benefit against the premiums they will pay to keep it in force, discounted to today. The cost of underwriting a policy, ordering medical records, commissioning life expectancy reports, and running the financial model, is largely fixed whether the face value is $250,000 or $5 million. On a large policy, that fixed cost is spread across a much bigger payout, so the return on the buyer’s effort is higher. Large faces are where the serious institutional capital wants to be.

And there is a lot of it. The pool of money buying life settlements, roughly $30 billion in policies currently in force by industry estimates, is dominated by institutional investors: private equity firms such as Apollo and Blackstone, pension funds, and family offices that treat life settlements as an asset class uncorrelated with the stock market. These buyers are built to absorb large policies. A $5 million or $10 million face value is not a problem for them to solve. It is exactly what they are shopping for.

This is the point most owners of large policies miss: a million-dollar policy is not an outlier in this market. It is the average case. The average policy settled through a broker carries a face value between $1.3 million and $1.6 million, according to industry broker data. If your policy is in that range or above, you are the buyer’s target, not their edge case.

At This Size, the Bid Spread Is Six Figures

Here is the single most important thing to understand about selling a large policy. When a policy goes to market, different buyers value it differently, sometimes very differently. The gap between the lowest and highest bid on the same policy is often 30 to 60 percent, and on a large face that gap is measured in hundreds of thousands of dollars.

On a $5 million policy, a 10 percentage point difference in the offer is $500,000. That is not a rounding error. It is the difference between a good outcome and a life-changing one, and it comes down almost entirely to whether the policy was shopped to one buyer or many.

Industry data documents the stakes plainly. In one case, a direct buyer offered $800,000 for two policies. When the same policies were marketed competitively to multiple buyers, the final sale came to $1,856,000, and the seller netted about $1.7 million after all broker commissions, more than double the direct buyer’s offer. That is one documented industry case, not a promise, and individual results vary. But the mechanism behind it is not luck. It is competition.

The pattern holds in the aggregate too. Industry data from 2021 showed the largest direct buyer paid an average of 16.7 percent of face value, while brokered transactions averaged above 20 percent, and competitive bidding routinely pushed individual policies well beyond that. A policy shopped to a single buyer gets whatever that buyer feels like paying. A policy shopped through a licensed broker to competing institutional buyers, averaging around 9 bids per brokered policy in industry data, gets the top of the market. This is the heart of the broker versus direct buyer difference.

This is what Citizens Life Group does. We are a licensed life settlement brokerage that represents you, the seller, not the buyer. We shop your policy to a network of competing institutional buyers, and we are required to disclose every offer we receive, so you can see the whole market before you decide anything. Larger policies are a particular focus of our practice: our buyer network includes institutional investors who specifically seek policies of $1 million and up, and our licensed broker, Jeff Hallman, has been part of more than $3 billion in closed transactions since 1999. On a large policy, that competition is worth more than any other single factor.

Own a policy of $1 million or more? It is worth a direct conversation before you make any move. Call (321) 270-0279 to talk it through, with no obligation and no upfront cost.

What Changes Above $5 Million

Selling a policy in the multi-million-dollar range works the same way as any other life insurance policy sale, but a few things get more involved as the numbers climb.

• More underwriting scrutiny. On a jumbo policy, buyers typically order two or more independent life expectancy reports rather than relying on one, because the dollars at risk justify the extra diligence. This is a sign of a serious buyer doing real work, not a red flag.
• Carrier strength matters more. Buyers care about the financial rating of the insurance company standing behind a large death benefit. Policies from highly rated carriers tend to draw stronger interest.
• Timelines can run longer. A typical life settlement takes 60 to 90 days from application to funding. A large or complex case, especially one with trust or business ownership, can run longer because there are more records to gather and more parties to sign.

None of this should discourage you. It is the difference between a genuine institutional purchase and a take-it-or-leave-it postcard offer. A large policy deserves a real process.

Who Owns Policies This Size (and Who Signs the Paperwork)

Policies of $1 million and up are frequently owned in ways a smaller personal policy is not. Knowing your ownership structure matters, because it determines who has the authority to sell.

• Trust-owned (ILIT) policies. Many large policies are held inside an irrevocable life insurance trust, set up years ago to keep the death benefit out of a taxable estate. With the federal estate tax exemption now permanent at about $15 million per person as of 2026, a great many of these trusts were built to solve a tax problem their families will never face. The trustee, often an adult child or a trusted friend, has the authority to sell, and the proceeds go to the trust. We cover this in depth in our guide to selling a trust-owned or ILIT policy, and if the family is considering ending the trust altogether, see what unwinding an ILIT involves.
• Survivorship (second-to-die) policies. These insure two people and pay only after both have died. They were sold almost entirely to fund estate taxes, so the same $15 million exemption change has left many of them unnecessary. They can be sold like any other policy.
• Business-owned policies. Key person coverage on an executive who has since retired, or a policy funding a buy-sell agreement for a partnership that no longer exists, is often still on the books and still being paid for. When the business reason is gone, the policy can be sold.
• Premium-financed policies. Some large policies were funded with a loan. These can still be sold, though the loan is settled as part of the transaction.

Most large settled policies are permanent coverage: universal life, guaranteed universal life, or whole life. A large convertible term policy can also qualify once it has been converted to permanent coverage.

If you are the family member serving as trustee on a parent’s policy, you have both the authority and, in most cases, a responsibility to seek the best available value rather than accept the first number offered. Shopping the policy competitively is exactly how a trustee meets that standard.

You Can Sell Part of It: Retained Death Benefit

Selling a large policy does not have to be all or nothing. In a retained death benefit arrangement, you sell most of the policy to a buyer who takes over the premiums, and you keep a portion of the death benefit for your heirs, with no more premiums to pay yourself. You do not receive a lump sum in this structure, but you eliminate the premium burden and preserve some coverage for your family.

On a large policy, this matters. Keeping even 10 or 20 percent of a multi-million-dollar death benefit can mean a meaningful legacy at zero ongoing cost. It is worth asking whether this option fits your situation.

Taxes on a Large Settlement

On a large settlement, the tax question is not an afterthought. Life settlement proceeds are generally taxed in three tiers: the portion up to what you paid in premiums (your cost basis) comes back tax-free, the portion above your basis up to the policy’s cash surrender value is taxed as ordinary income, and anything above the cash surrender value is generally taxed as a capital gain. This framework comes from IRS Revenue Ruling 2009-13, as modified by the 2017 Tax Cuts and Jobs Act.

Because the dollars are large, the tax treatment can meaningfully change what you keep. We strongly recommend talking with a tax professional before you sell. Citizens Life Group does not provide tax advice. Our full life settlement tax treatment guide walks through the framework in more detail.

How to Get a Real Number for Your Policy

The only way to know what your specific policy will bring is to put it through a real competitive process. Here is what that looks like with Citizens Life Group.

We start with a free, no-obligation estimate based on your age, your policy, and your general health. (You can also review the basic qualification criteria first.) If the policy looks like a fit, we gather your policy details and medical records and take it to our network of competing institutional buyers. As offers come in, we show you every one of them. You are never obligated to accept, there is no upfront cost, and every fee and commission is disclosed in writing before you sign anything.

To get started, you can see what your policy is worth in a few minutes, run the numbers yourself with our life settlement calculator, or simply call (321) 270-0279 and talk to a person. For a large policy, a direct conversation is often the fastest way to a real answer.

Have the following handy and the estimate goes quickly:

• Your most recent policy statement (showing the face value and policy type)
• A rough sense of the current annual premium
• A general picture of the insured’s age and health

Frequently Asked Questions

How much can I get for a $1 million life insurance policy?

A $1 million policy typically sells for $100,000 to $250,000 in a life settlement, based on the 10 to 25 percent of face value reported in industry data. Offers rise for older sellers and those with health changes, and can reach higher percentages of face value. The same policy surrendered to the insurance company would typically return only $30,000 to $50,000. Individual results vary.

How much is a $2 million life insurance policy worth if I sell it?

A $2 million policy commonly falls in the $200,000 to $500,000 range in a life settlement, using the same typical 10 to 25 percent of face value band. Age, health, policy type, and premium costs all move the number, and competitive bidding among buyers is what pushes it toward the top of the range. There is no guaranteed amount, and individual results vary.

Can I sell a $5 million or $10 million policy?

Yes. Large policies are not harder to sell. They often attract more competition, because institutional buyers spread their fixed underwriting costs across a bigger payout. A $5 million policy commonly falls in the $500,000 to $1.25 million range and a $10 million policy in the $1 million to $2.5 million range at typical percentages of face value. Buyers usually order two or more independent life expectancy reports on policies this size.

Who buys million-dollar life insurance policies from seniors?

The buyers are institutional investors: private equity firms such as Apollo and Blackstone, pension funds, and family offices that hold life settlements as an asset class. They rarely buy directly from sellers. A licensed broker takes your policy to these buyers competitively, which is how you reach the top of the market rather than a single buyer’s opening offer. Larger policies are a particular focus at Citizens Life Group: our buyer network includes institutional investors who specifically seek policies of $1 million and up.

Can I sell part of a large policy and keep some of the coverage?

Yes, through a retained death benefit arrangement. You transfer most of the policy to a buyer who takes over the premiums, and you keep a portion of the death benefit for your heirs with no further premiums to pay. You do not receive a cash lump sum in that structure, but you remove the premium burden while preserving some coverage. It is worth asking whether it fits your goals.

Do larger policies take longer to sell?

Sometimes. A typical life settlement runs 60 to 90 days. A large policy, especially one owned by a trust or a business, can take longer because there are more records to gather and more parties who need to sign. The extra time usually reflects more thorough underwriting, which is what a serious institutional purchase involves.

Sources

• Life Insurance Settlement Association (LISA), 2025 Annual Market Data, released May 19, 2026
• National Association of Insurance Commissioners (NAIC), Viatical Settlements Model Act #697
• Internal Revenue Service, Revenue Ruling 2009-13, and the Tax Cuts and Jobs Act of 2017
• Aggregated industry broker data on settled policy size, bid counts, and direct-buyer pricing

About This Article

Citizens Life Group is a licensed life settlement brokerage that represents you, the seller, and shops your policy competitively to competing institutional buyers, including buyers who specifically seek larger policies of $1 million and up. The figures here are drawn from LISA’s 2025 Annual Market Data and aggregated industry data. Ranges are illustrative, not quotes, and individual results vary by policy, age, health, and the bidding round on a given day. This article is for general education and is not financial, tax, or legal advice.