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 New York, the New York State Department of Financial Services 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 New York?
Regulated by: New York State Department of Financial Services
Life settlements are legal and regulated in New York
New York's Department of Financial Services (DFS) maintains one of the most comprehensive regulatory frameworks for life settlements in the country. The state requires rigorous licensing of providers and brokers, mandates extensive consumer disclosures, and enforces strong anti-fraud provisions. New York's approach reflects its position as a leading financial regulatory jurisdiction.
New York City residents face a combined state and city income tax burden that makes professional tax planning especially critical for life settlement sellers. Upstate New York residents may have different tax considerations but should still seek professional guidance.
Licensing Requirements in New York
Life settlement providers and brokers in New York must obtain licenses from the New York State Department of Financial Services. New York's licensing process is among the most rigorous in the country, and licensees are subject to ongoing examination and compliance oversight.
When working with LifeSettlementEstimate.com, you can be confident that we connect you only with licensed and vetted buyers and brokers who meet New York'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 New York
New York requires that a life insurance policy be in force for a minimum of two years before it may be sold in a life settlement. The state provides exceptions for terminal and chronic illness and other qualifying circumstances. New York's regulations are among the most specific regarding the conditions under which exceptions are granted.
Consumer Protections for New York Residents
New York's life settlement consumer protections are extensive, including mandatory written disclosures, a 30-day rescission period following contract execution, and anti-fraud provisions. New York has historically been a leader in setting high standards for the protection of life settlement sellers.
What Your Policy Might Be Worth in New York
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 New York 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 New York
New York has among the highest combined state and local income tax rates in the United States. Life settlement proceeds above the policy's cost basis may be subject to significant state and possibly city income taxes in addition to federal obligations. Tax advice from a qualified New York tax professional is essential.
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 New York 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 New York?
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 New York in cities like New York City, Buffalo, and beyond, our platform offers a compliance-first approach — connecting sellers with licensed, vetted buyers who operate within New York'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 NY buyers
Compliance-First
HIPAA-compliant, fully transparent process
A New York Resident's Story
Frances Lichtman, 78
Rochester, New York
"Frances, a retired corporate attorney from Rochester, had maintained a $1 million whole life insurance policy for most of her career. After reviewing her comprehensive estate plan with her attorney and financial advisor, she determined that the policy no longer served the same role it once had. Her advisor recommended she explore a life settlement, and Frances used LifeSettlementEstimate.com as a first step to understanding her policy's potential value."
This is a fictional illustrative scenario. It does not represent an actual client or guaranteed outcome.
Frequently Asked Questions — New York
Get a Free Life Settlement Estimate in New York
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