Life insurance policyholders explore secondary markets for policy value

Approximately 51% of the U.S. population holds life insurance, with industry assets covering roughly 41% of the nation’s collective yearly personal income. Data from the American Council of Life Insurers (ACLI) indicates an annual voluntary surrender rate of about 1.3%, meaning roughly 1.6 million customers cash out their policies each year. Additionally, 6.6% of individual policies lapsed in 2024.

Many policyholders surrender policies directly to carriers, accepting a default cash surrender value. These values are determined by internal actuarial tables and are subject to surrender charges, fees, and penalties. However, an open secondary market for these contracts exists. As the secondary market is projected to grow by 10% in 2025, more consumers are researching options beyond the standard surrender value to treat their coverage as a negotiable financial asset.