What Is a Life Settlement?
A life settlement is the legal sale of an existing life insurance policy to a licensed third-party buyer for a lump-sum cash payment. The amount you receive is typically more than the policy's cash surrender value, but less than its face value. Once the sale is complete, the buyer assumes ownership of the policy, takes over premium payments, and receives the death benefit when the insured passes away.
Life settlements are a federally recognized financial transaction and are regulated at the state level. In Arizona, the Arizona Department of Insurance and Financial Institutions oversees and enforces the applicable rules. This secondary market gives policyholders a legitimate alternative to simply lapsing or surrendering a policy — often recovering significantly more value in the process.
To learn more about how this process works in general, visit our How It Works page.
Is Selling a Life Insurance Policy Legal in Arizona?
Regulated by: Arizona Department of Insurance and Financial Institutions
Life settlements are legal and regulated in Arizona
Arizona's Department of Insurance and Financial Institutions regulates life settlements under a framework designed to ensure consumer transparency and market integrity. The state has adopted comprehensive rules governing provider and broker licensing, disclosure requirements, and transaction oversight.
Given Arizona's large retiree population, many residents carry life insurance policies that may now be worth more on the secondary market than their cash surrender value, especially as health changes occur with age.
Licensing Requirements in Arizona
Arizona requires all life settlement providers and brokers to obtain licensure from the Department of Insurance and Financial Institutions. The licensing process evaluates the applicant's qualifications and adherence to state standards.
When working with LifeSettlementEstimate.com, you can be confident that we connect you only with licensed and vetted buyers and brokers who meet Arizona's regulatory requirements. Verifying licensure is a critical first step before entering into any life settlement transaction — and one we handle on your behalf.
Waiting Period Rules in Arizona
Arizona requires a two-year waiting period from the date a life insurance policy is issued before the policyholder may enter into a life settlement. Exceptions are recognized for terminal or chronic illness, and for policies obtained through material misrepresentation.
Consumer Protections for Arizona Residents
Arizona mandates written disclosures from providers to sellers, including information about the transaction process, the seller's rights, and the names of any parties involved. A rescission period following contract execution allows sellers to reconsider their decision.
What Your Policy Might Be Worth in Arizona
Life settlement offers vary widely based on individual circumstances. As a general industry benchmark, policyholders typically receive offers ranging from 10% to 30% of the policy's face value — and in some cases more, depending on the insured's age, health status, policy type, and premium obligations.
For example, a $500,000 policy in Arizona could potentially generate a life settlement offer between $50,000 and $150,000 — compared to far less (or nothing) if the policy were simply lapsed or surrendered. These are industry-typical ranges and not guarantees. Your actual offer will depend entirely on your specific circumstances.
Important Disclosure
The ranges provided are general industry estimates and educational in nature. No specific payout is guaranteed. Actual offers depend on your policy details, health information, and buyer demand at the time of transaction. LifeSettlementEstimate.com does not guarantee any specific offer amount.
The best way to get an accurate picture of your policy's potential value is to start with a free, no-obligation estimate.
Tax Considerations in Arizona
Arizona imposes a state income tax that may apply to life settlement proceeds above the policy's adjusted basis. The tax treatment can vary depending on individual circumstances, and professional tax guidance is recommended.
Tax Disclaimer
The above is general educational information and does not constitute tax advice. Tax laws are complex and subject to change. Please consult a licensed CPA or tax attorney before completing any life settlement transaction to understand the full tax implications of your specific situation.
How the Life Settlement Process Works
Get a Free Estimate
Use LifeSettlementEstimate.com to receive a preliminary valuation of your policy. There's no personal information required beyond the basics, and no obligation to proceed.
Submit Policy Details
If you decide to move forward, you'll submit your policy information and complete a brief medical authorization. Our team gathers records and prepares your file for buyers.
Receive Competitive Offers
Your policy is presented to our network of 50+ licensed buyers in Arizona and across the country. Multiple offers are collected and presented to you for comparison.
Accept or Decline
You are never obligated to accept any offer. If you accept, the closing paperwork is handled, and funds are typically received within 30–60 days of final approval.
See our full How It Works guide for a complete walkthrough of the life settlement process.
Why Use LifeSettlementEstimate.com in Arizona?
LifeSettlementEstimate.com was built around one core principle: policyholders deserve transparent, unbiased information before making a major financial decision. We are an educational-first platform, not a high-pressure sales operation.
For residents of Arizona in cities like Phoenix, Tucson, and beyond, our platform offers a compliance-first approach — connecting sellers with licensed, vetted buyers who operate within Arizona's regulatory framework.
Free Estimate
No cost to get your initial policy valuation
No Obligation
You decide if and when to proceed
50+ Vetted Buyers
Competitive offers from licensed AZ buyers
Compliance-First
HIPAA-compliant, fully transparent process
A Arizona Resident's Story
Beverly Sandoval, 72
Scottsdale, Arizona
"Beverly, a retired real estate agent who relocated from Chicago to Scottsdale in her early 60s, had a $400,000 whole life insurance policy she had maintained for decades. As her estate plan evolved and her children became financially stable, she began wondering whether the policy still aligned with her goals. A certified financial planner introduced her to the concept of a life settlement, and Beverly used LifeSettlementEstimate.com to get a starting point before speaking with a licensed broker."
This is a fictional illustrative scenario. It does not represent an actual client or guaranteed outcome.
Frequently Asked Questions — Arizona
Get a Free Life Settlement Estimate in Arizona
Ready to find out what your policy may be worth? Our free estimate takes just minutes — with no obligation, no pressure, and no cost. Join Phoenix and Scottsdale residents who have already used LifeSettlementEstimate.com to make informed decisions about their life insurance.
Free estimate · No obligation · Arizona licensed buyers · HIPAA compliant