Best Life Settlement Companies

Turn your life insurance policy into cash

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A life settlement occurs when you sell your life insurance policy to a third party who then receives any death benefits from the policy if you die. Typically in this transaction, you will receive a cash payment that is larger than the policy surrender value but much less than the death benefit value. The third party that purchases or arranges the purchase of these policies is called a life settlement company or provider. 

The number of life settlements is increasing every year due to the combination of an aging population and their need for alternative income sources. In fact, within 10 years we’ll be looking at an America where one in every five citizens will be of retirement age. As people are living longer, it’s only becoming more important to find alternative income sources to fund their lives for more years than they may have planned for.

When considering a life settlement, it’s important to find a partner that you can trust. The best life settlement companies will be upfront about their process, ideally will either purchase your policy themselves or will be able to show clear success with a bid process, and will have fees higher than the industry average. We’ve compiled a list of our top life settlement company options to help you narrow your search.

The 5 Best Life Settlement Companies of 2021

Best Overall : Abacus Life Settlements

Abacus Life Settlements
Abacus Life Settlements

Abacus Life Settlements is our best overall life settlement company because of its straightforward and easy process combined with its great customer reviews. If you need cash quickly, then this is the best option for you because the company guarantees that you’ll receive your cash offer within 24 hours. The company’s easy-to-use process and speed, along with its top-notch Better Business Bureau (BBB) rating, makes for a great offering.

Here’s a more detailed breakdown of the company’s requirements: 

  • Speed of Setting Up: Offer within as little as 24 hours
  • Number of States Served: 44
  • Buys Policies Directly: Yes
  • BBB Rating: A+

Runner-Up, Best Overall : Coventry



Coventry was one of the first life settlement companies around, making them one of the most experienced at helping you through a transaction. Coventry can conduct business nationwide, so it can help you regardless of where you live, and it has an A+ rating from the BBB. It also offers an expedited process for policies with values between $100,000 and $500,000, allowing you to close in less than 30 days. Their combination of experience and settlement options make them our runner-up for best overall.

Here’s a more detailed breakdown of the company’s requirements: 

  • Speed of Setting Up: Close in as little as 30 days
  • Number of States Served: 50
  • Buys Policies Directly: Yes
  • BBB Rating: A+

Best for the Value of Payouts : Habersham

Habersham Funding

Habersham Funding 

Habersham Funding is known for paying you more for the value of your policy than other life settlement providers. Their average payout as a percentage of the total value of your policy is nearly double what the industry average is, and it doesn’t charge a brokerage fee, which makes them our best choice if you are just looking for the highest payout value. The drawbacks are that Habersham is not currently accredited by the BBB and their process takes longer than most. 

Here’s a more detailed breakdown of the company’s requirements: 

  • Speed of Setting Up: Two to three months
  • Number of States Served: 47
  • Buys Policies Directly: Yes
  • BBB Rating: Not BBB-accredited

Best for Smaller Policies : Institutional Life Services

Institutional Life Services

Institutional Life Services

Institutional Life Services (ILS) does not buy policies directly, but it is excellent at finding buyers for your specific policy type. They were founded and run by people with a lot of experience and connections in the financial industry. ILS has been around since 2007 and has the right connections with partners who want to invest in life settlements. It does not, however, purchase policies directly. 

Here’s a more detailed breakdown of the company’s requirements: 

  • Speed of Setting Up: Not disclosed, but expect longer than 30 days
  • Number of States Served: 41
  • Buys Policies Directly: No
  • BBB Rating: Not currently listed or accredited

Best Alternative Broker Option : Harbor Life Settlements

Harbor Life Settlements

Harbor Life Settlements

Harbor Life Settlements is our top choice if you’re looking for an experienced broker in this space to maximize the value of your offer. It uses partnerships to take your policy to market and receive the highest bid possible. This creates more fees than many of the other options on this list since it doesn’t buy directly, but it could mean you’ll end up with more money in your pocket. 

Here’s a more detailed breakdown of the company’s requirements: 

  • Speed of Setting Up: Two to eight weeks
  • Number of States Served: 50
  • Buys Policies Directly: No; the company works with brokers
  • BBB Rating: A+ rating, not accredited


What Is a Life Settlement Company?

A life settlement company is a business that either buys the interest in your life insurance policy directly or helps to arrange the sale of your policy to independent investors. A life settlement typically occurs when someone of retirement age is looking to get access to the value of their policy as an extra source of income. But, they can also be helpful to individuals who can no longer afford their life insurance policy and are considering defaulting. Someone who buys a policy not only provides the selling policyholder with cash upfront but also takes over responsibility for paying ongoing premiums. In exchange, they receive any death benefit payments that are paid on the policy if you die.

Life settlement companies are not issuers of insurance. Some brokers may be able to help you get insurance as well as broker the bid process on your life settlement, but traditional insurance companies would not be where you look for a life settlement. Your insurance issuer won’t change under a life settlement transaction as your policy will still remain with only the beneficiary changing. 

How Do Life Settlements Work?

Selling your life insurance policy can be complicated and time-consuming if you don’t find an experienced company to work with. Some life settlement companies will purchase your life insurance policy directly and others will serve as a broker and manage a bidding process to sell your insurance policy to outsiders. Regardless, typically the process to life settlements will look something like this: 

Step 1: Research and determine what life settlement company you’d like to work with. 

Step 2: Complete your application.

Step 3: Provide the right documentation, including medical records that can show your general health condition.

Step 4: The life settlement company will review your application and if all is well you’ll be sent to underwriting. 

Step 5: If your life settlement company isn’t purchasing the policy directly then your policy will enter a bidding process with potential buyers. 

Step 6: You’ll receive an offer and you can accept or decline at this point. 

Step 7: Complete closing documents. 

Step 8: Notify the insurance company of the transfer of ownership. 

Step 9: When the insurance notifies you and the buyer of the transfer then the funds are released to you. 

This entire process can take up to three months to complete, depending on your situation and the buyer that you work with. Some life settlement companies that purchase your policy directly can reduce this to a few weeks. If you’re desperate to receive the cash faster than that, you could look at a number of loan options that would close much faster. 

Who Can Use a Life Settlement Company?

Anyone with an eligible life insurance policy can use a life settlement company, depending on the laws of your state. The typical person using this settlement option is over 65 years of age or has a serious medical condition. The specific requirements for most life settlement companies to work with you are: 

  • Type of Policy: whole, universal, or convertible term
  • Policy Value: $100,000+
  • Policy must be transferable
  • Insured’s Life Status: must have a life expectancy of less than 20 years, though typically less than 15 years is best
  • Time Policy Is in Place: varies by state, typically two or more years

Today, 44 states regulate life settlements and six still do not. Some of these states have strict regulations and others only regulate certain types of transactions. Prior to these regulations, many policyholders didn’t know that this option existed, leaving them with an unsatisfactory surrender payment when they could no longer afford their policy. You should check with your state’s department of insurance for any specific requirements or laws enacted in your state. 

How Much Do Life Settlements Cost?

Your insurance company won’t charge you if you decide to do a life settlement transaction. However, you may use a broker to maximize the amount your policy is able to sell for. While the broker’s work may more than pay for itself you should be aware of the costs associated with this work. 

A broker will often take a commission that is 30% of your final settlement amount. The broker’s fees are a one-time cost that is generally structured in one of three ways: 

  1. A percentage of the life settlement amount
  2. A percentage of the policy’s face value
  3. A percentage of the life settlement minus the cash surrender value

If structured correctly, your broker’s fee should be around 20% of the final life settlement amount. Anything more than 25% of the life settlement amount should be considered expensive or excessive. Using a life settlement company can bypass some of these large costs. If you do so, the only costs will be how much you could be costing your beneficiaries by selling your policy for less than the overall value upon your death. 

Make sure you check the fine print and understand the fee structure of your deal.

Who Should Consider Life Settlements?

Typically, individuals who use a life settlement are either looking to receive the cash value for something they need now or they just can’t afford the premiums any longer. Going this route allows you to receive more cash than you would if you just surrendered the life insurance policy, so it could be a good fit for a number of situations, including: 

  • You need to supplement your retirement income. 
  • You can’t afford the policy.
  • You don’t need the policy because you’ve outlived the beneficiaries of the policy.
  • Your term life insurance is expiring soon and you want to convert it to a permanent policy to cash out.
  • You need cash now to cover unexpected expenses. 

How We Chose the Best Life Settlement Companies 

We looked at more than a dozen life settlement companies and narrowed them down to the best based on their ability to serve customers and get policyholders cash quickly. To evaluate providers, we looked for companies that can close transactions quickly without a bid process and those that are upfront about how they operate. Costs, company reviews, and speed of funding were considered as well. Finally, the number of states where each company conducts business as well as third-party ratings such as those from the BBB were considered to help select the best life settlement companies.

Article Sources

  1. "Why Life Settlements Will Continue To See Growth." Accessed November 26, 2020.

  2. Better Business Bureau. "Abacus Life Services, LLC." Accessed November 26, 2020.

  3. Windsor Life Settlements LLC. "Part 8: Life Settlement Laws & Regulations." Accessed November 26, 2020.