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Most policyholders are surprised to learn that term life insurance typically has no cash value. In most cases, though not all, once the policy expires, so does the protection—and there’s usually nothing left to “cash out.” But under certain circumstances, you can convert or sell your term policy for a cash payout before it lapses.
Unlike whole life or universal life insurance, term coverage is pure protection. You pay a fixed premium for a set number of years, and if you outlive the term, the policy simply ends.
That simplicity keeps premiums low but also means there’s no savings component to withdraw or borrow against.
If your term policy includes a conversion option, you may be able to turn it into a permanent policy before the term expires. This conversion doesn’t require new medical underwriting—a key advantage if your health has declined. Once converted, the policy can be sold through a life settlement, allowing you to receive a lump sum cash payment directly from an investor who takes over future premiums. The payout is typically far higher than surrendering the policy or letting it lapse.
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Let’s say a 72-year-old with a $500,000 term policy has just one year left on coverage. If that policy is convertible, Windsor Life Settlements could help convert it into a permanent one and present it to institutional buyers. Depending on age, health, and premiums, the seller might receive anywhere from 10% to 25% of the face value in cash.
If your policy is not convertible or the conversion deadline has passed, there’s unfortunately no way to cash it out. Once the coverage ends, the benefit disappears—and years of premiums go unrecovered.
That’s why reviewing your policy well before its expiration date is critical.
A licensed life settlement broker reviews your policy, confirms its conversion status, and markets it to multiple buyers to secure the highest possible offer.
At Windsor Life Settlements, we act as an independent advocate—not a direct buyer—ensuring you receive fair value without the high-pressure tactics seen in national TV ads.
You generally can’t “cash out” a term policy the way you can with permanent insurance—but you may be able to sell it if it’s convertible. The key is timing: once the conversion period closes, the opportunity is gone.