Life Policy Loan & Settlement Calculator
Two ways to pull cash from a permanent life insurance policy: borrow against the cash value, or sell the policy outright. This tool estimates both.
Your policy
Your loan
Policy loans don't have to be repaid on a schedule — but unpaid interest compounds and is added to the loan balance. If the balance ever exceeds the cash value, the policy lapses and the IRS can treat the gain as taxable income (a "tax bomb"). Most carriers charge 5–8% APR on policy loans; some offer "direct recognition" vs. "non-direct" which affects how dividends are credited.
Your policy
Estimated settlement
Settlements are quotes, not guarantees. Actual offers depend on life-expectancy underwriting (a third-party medical review), policy structure, premium load, and current secondary-market demand. Healthy seniors typically see 10–25% of face; impaired health 30–60%; terminal cases (viatical settlements, LE under 24 months) can reach 50–80%. Settlements are taxable above your cost basis under IRC §101(a)(2). 1099-LS may be issued.
When this makes sense — and when it doesn't
When it makes sense
- Policy loan: short- to medium-term liquidity at a known rate, beneficiaries can still receive a (reduced) death benefit, no underwriting required.
- Life settlement: insured is 65+, health is impaired, policy face is $100K+, premiums have become unaffordable, and you'd otherwise surrender or lapse the policy.
- You want to redeploy the cash into income-generating assets, long-term care, or estate-equalization gifts.
When it doesn't
- Policy loan: you can't or won't service the interest, your policy is already overloaned, or the carrier's direct-recognition rule cuts dividends sharply.
- Life settlement: insured is healthy and under 70 — offers are usually 10–20% of face, often less than continuing to hold the policy.
- The policy is term-only (with no convertibility feature) — there's nothing to sell.
- You still need the death benefit for estate liquidity, business buy-sell, or income-replacement reasons.
One more option. Many carriers will offer a "reduced paid-up" or "extended term" non-forfeiture option instead of a full surrender — that preserves some death benefit without further premiums. Always price that against a settlement offer before signing.
Which path fits you?
This tool helps three audiences. Pick the one that's you.
I'm a small business owner
Permanent policy with cash value? We route to the right loan or settlement specialist.
Get capital →
I refer deals to Lending by JLFG
Life-policy strategies as a specialty product for HNW or senior clients.
Join the network →
I'm an institutional funder
Life-settlement deal flow with face / age / health-status pre-screened.
Partnership inquiry →
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Life Settlement Market Scan
Policy you don't need? Selling it on the secondary market often beats borrowing against it.
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Business Cash-Out Calculator
Using the proceeds to buy or fund a business? Anchor the deal structure first.