Texas Life Settlements
Life Settlements in Texas
Texas has the third-largest senior population in the United States — more than 3.5 million residents aged 65 and older — and it is one of the fastest-growing retiree markets in the country. With no state income tax and a strong regulatory framework, the Lone Star State offers significant advantages for policyholders looking to sell their life insurance for more than its cash surrender value.
Why Texas Is a Key Life Settlement Market
Texas consistently ranks among the top three states in the country for life settlement activity. The reasons go beyond sheer population size: Texas combines a massive and rapidly growing senior population, one of the highest rates of life insurance ownership in the nation, and a business-friendly environment with no state income tax — meaning life settlement proceeds are not subject to state-level taxation.
For Texas seniors who own life insurance policies they no longer need or can no longer afford, a life settlement offers a way to convert that asset into a significant cash payment — according to the Life Insurance Settlement Association (LISA), typically several times more than the cash surrender value your insurance company would offer. Rather than letting a policy lapse or surrendering it for pennies on the dollar, Texas policyholders can tap into a competitive marketplace of institutional buyers. Browse real client results to see what others have received.
"Texas is one of the largest insurance markets in the world. With 3.5 million seniors, no state income tax, and strong regulatory protections under the Texas Insurance Code, the Lone Star State is one of the most favorable environments in the country for life settlement transactions."
Texas by the Numbers
The scale of Texas's life settlement market reflects the state's enormous size, rapid growth, and unique financial advantages.
3.5M+
Texas residents aged 65 and older — the 3rd largest and one of the fastest-growing senior populations in the U.S.
0%
Texas state income tax rate — life settlement proceeds are not subject to any state income tax
4–7×
Typical life settlement payout vs. the cash surrender value your insurance company would offer
Why Texas Seniors Sell Their Life Insurance
Premiums are straining retirement budgets
Texas may not have a state income tax, but property taxes and healthcare costs are among the highest in the nation. Many seniors find that premium payments are eating into fixed incomes that need to stretch further.
The coverage is no longer needed
Children are grown, mortgages are paid off, a business has been sold, or a spouse has passed. The original reason for the policy no longer applies — but the policy still has substantial market value.
Healthcare and long-term care costs
Even with Medicare, out-of-pocket medical costs can be significant in Texas. A life settlement can provide tens or hundreds of thousands of dollars to cover medical expenses, home care, or assisted living.
Funding retirement in the Lone Star State
Whether it's home renovations, travel, helping grandchildren with education, or simply enjoying retirement, a life settlement puts cash in your hands today rather than leaving value locked in a policy.
Estate planning has changed
Beneficiaries have changed, financial priorities have shifted, or an advisor has identified a better use for the funds currently going to premium payments. Texas community property laws may also factor into estate decisions.
Taking advantage of no state income tax
Texas residents who sell their life insurance policies benefit from having no state income tax applied to the proceeds. While federal taxes may still apply, the absence of state tax is a meaningful financial advantage.
Texas Life Settlement Laws & Regulations
Life settlements in Texas are governed by Texas Insurance Code Chapter 1111A, which establishes a comprehensive regulatory framework for the life settlement industry. This legislation was designed to protect Texas policyholders while maintaining a fair, transparent, and competitive marketplace.
The Texas Department of Insurance (TDI) oversees all life settlement activity in the state, including the licensing of brokers and providers, review of transaction disclosures, and enforcement of consumer protection rules. Texas also imposes a 2-year waiting period on most policies (aligned with the policy's contestability period), with important exceptions designed to protect seniors in specific life circumstances.
Licensing Requirements
All life settlement brokers and providers operating in Texas must be licensed by the Texas Department of Insurance (TDI). This ensures that anyone involved in your transaction has been vetted and is subject to ongoing regulatory oversight. Working with an unlicensed entity is not only risky — it's illegal under Texas law.
Mandatory Disclosures
Texas law requires that you receive clear, written disclosures before signing any life settlement agreement. These disclosures must include the estimated cash surrender value, the offer amount, any fees or commissions, the buyer's identity, and your rights as the seller — including your right to rescind the contract.
15-Day Rescission Period
Under Texas Insurance Code Chapter 1111A, you have a minimum of 15 days after signing the life settlement contract to change your mind and cancel the transaction — no questions asked. This cooling-off period gives you time to reconsider, consult with family or advisors, and make sure you're comfortable with your decision.
2-Year Waiting Period
Texas generally requires that a life insurance policy be in force for at least 2 years before it can be sold in a life settlement — aligned with the standard contestability period. However, there are important exceptions: the waiting period does not apply if the policyholder has been diagnosed with a terminal illness, has gone through a divorce or death of a spouse, has retired or become disabled, or has filed for bankruptcy. These exceptions ensure that Texans facing major life changes are not locked out of the market.
Anti-Fraud Provisions
The Texas life settlement statute includes specific anti-fraud provisions. It is illegal to misrepresent information, coerce policyholders, or engage in stranger-originated life insurance (STOLI) schemes in the state of Texas. The TDI actively investigates complaints and enforces these protections.
Privacy Protections
Your personal and medical information is protected under Texas law. Buyers, brokers, and providers must handle all personal health information in accordance with HIPAA and state privacy regulations. Your information cannot be shared outside of what is strictly necessary for the transaction.
Texas Consumer Protections at a Glance
How the Life Settlement Process Works in Texas
The process is the same whether you live in Houston, Dallas, San Antonio, Austin, or anywhere else in Texas. Here's what to expect.
Request Your Free Estimate
Fill out our short online form or call us directly. We'll review your policy details — type, face value, and basic health information — and let you know if your policy qualifies. This is free and there is no obligation.
Start your free estimate →Qualification & Review
A licensed life settlement specialist reviews your information and confirms your policy meets market criteria, including verification that it satisfies the Texas 2-year holding requirement (or qualifies for an exception). We'll explain the process, timeline, and answer any questions you have.
Documentation & Underwriting
You provide basic documents — your policy summary, premium statements, and a medical records authorization. Independent life expectancy providers review your medical records to determine your policy's market value. We handle coordinating all of this for you.
Competitive Bidding
Your policy is submitted to a network of qualified institutional buyers. A fiduciary-licensed broker shops your policy competitively to multiple buyers to maximize your payout. This is where working with a broker — rather than a single buyer — makes the biggest difference.
Review Offers & Decide
All offers are presented to you with full transparency — including all fees and commissions, as required by Texas law. You review them at your own pace with zero pressure. You decide whether to accept or decline.
Closing & Payment
If you accept, closing documents are prepared. You sign with the help of a notary, funds go into escrow, and ownership transfers to the buyer. You receive your payment by check or wire transfer. Remember: Texas gives you 15 days after signing to change your mind. And as a Texas resident, your proceeds are not subject to state income tax.
Who Qualifies for a Life Settlement in Texas?
Most Texas seniors who meet the following criteria are good candidates for a life settlement. Not sure if you qualify? Check our qualification requirements page.
Texas resident aged 65 or older
The insured on the policy should be 65+. Age 70+ typically yields the strongest offers from buyers.
Policy face value of $100,000 or more
Larger policies ($250K+) attract the most competitive bids. Policies under $100K rarely qualify in today's market.
Whole life, universal life, or convertible term policy
Permanent life insurance policies are most commonly sold. Convertible term policies may also qualify if the conversion window is still open.
Policy has been in force for at least 2 years
Texas requires a 2-year holding period (aligned with the contestability period). Exceptions apply for terminal illness, divorce, death of spouse, retirement, disability, or bankruptcy.
Health has changed since the policy was issued
This can actually increase your policy's value. Buyers price offers based on life expectancy — changes in health often work in your favor.
The policy is no longer needed or premiums are unaffordable
The most common reasons Texas seniors choose to sell. Don't surrender your policy to the insurance company for a fraction of its worth.
Why Texas Residents Choose Citizens Life Group
Citizens Life Group works with policyholders across the entire state of Texas. We understand the Texas life settlement market and the unique advantages Texas residents have when selling a life insurance policy. Here's why Texas policyholders trust us — read client reviews to hear it in their words.
We Know the Texas Market
Texas is one of the largest insurance markets in the world. We work with buyers and brokers who specialize in Texas policies and understand the regulatory landscape under TDI oversight.
Fiduciary Representation
We connect you with fiduciary-licensed brokers who are legally required to act in your best interest — not the buyer's. Your broker advocates for the highest possible payout on your behalf.
Competitive Bidding Process
Your policy is shopped to a network of institutional buyers. Multiple buyers competing for your policy means higher offers for you — often significantly more than any single buyer would offer alone.
No Upfront Fees — Ever
Our services are completely free to you. We only earn a commission if you accept an offer and close. If you don't sell, you pay nothing. There's zero financial risk to exploring your options.
Full Transparency
Every offer, every fee, every detail is disclosed to you clearly — as required by Texas law and as a matter of our own principles. No hidden costs, no confusing language.
No Pressure, No Rush
We believe in treating every client with patience, dignity, and respect. You make the decision on your timeline. We're here to educate and inform — never to push.
Texas Life Settlement FAQ
Are life settlements legal in Texas?
Yes. Life settlements are fully legal in Texas and are regulated under Texas Insurance Code Chapter 1111A. The Texas Department of Insurance (TDI) oversees all life settlement activity in the state, including the licensing of brokers and providers. Texas has a well-established regulatory framework that protects policyholders throughout the entire process.
What is the rescission period in Texas?
Texas law provides a minimum 15-day rescission period after you sign a life settlement contract. During this time, you can cancel the transaction for any reason and get your policy back — no questions asked. This cooling-off period is designed to give you time to reconsider, consult with family or advisors, and make sure you are comfortable with your decision.
What is the waiting period in Texas?
Texas requires that a life insurance policy be in force for at least 2 years before it can be sold in a life settlement — aligned with the standard contestability period. However, there are important exceptions. The waiting period does not apply if the policyholder has been diagnosed with a terminal illness, has gone through a divorce or death of a spouse, has retired or become disabled, or has filed for bankruptcy. If any of these circumstances apply to you, your policy may qualify even if it is less than 2 years old.
Is there a state income tax advantage for Texas life settlements?
Yes. Texas has no state income tax, which means life settlement proceeds are not subject to any state-level income tax. This is a meaningful financial advantage compared to states that do tax life settlement proceeds. Keep in mind that federal income tax may still apply depending on your cost basis in the policy, so we recommend consulting with a tax professional before completing a transaction.
How long does a life settlement take in Texas?
The entire process typically takes 60 to 90 days from start to payment. This includes qualification, verification of the 2-year holding requirement, underwriting, the competitive bidding process, and closing. Policies that qualify under one of the waiting period exceptions may move through the process on a similar timeline. Complex cases or very large policies may take longer.
Can I sell a term life insurance policy in Texas?
Standard term life policies typically do not qualify for a life settlement because they have no cash value and expire at the end of the term. However, if your term policy has a conversion option that allows you to convert to a permanent (whole life or universal life) policy, it may qualify. The conversion window is critical — if it is still open, the policy may have significant value. We can review your specific policy to determine eligibility.
Do I need an attorney for a life settlement in Texas?
Texas law does not require you to hire an attorney for a life settlement, and most transactions are completed without one. However, you always have the right to consult with an independent attorney at any time during the process. The mandatory disclosure requirements under Texas law are designed to ensure you have full information before making a decision, and the 15-day rescission period provides additional time to seek counsel if you wish.
I live in Texas but my policy was issued in another state. Can I still sell it?
Yes, in most cases. The key factor is where the policyholder resides, not where the policy was originally issued. As a Texas resident, your transaction would be subject to Texas's consumer protections and regulations under Chapter 1111A, regardless of where the policy was purchased.
Serving All of Texas
Citizens Life Group helps policyholders across the entire state of Texas and nationwide. We also serve seniors in Florida, California, New York, and Pennsylvania. Whether you live in a major metro or a smaller community, we can help you explore your options.
Find Out What Your Policy Is Worth in Texas
Our free estimate takes less than 3 minutes. No obligation, no cost, no pressure. A specialist will review your information and let you know honestly whether you qualify — and what your policy could be worth on the open market.