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 Texas, the Texas Department of Insurance 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 Texas?
Regulated by: Texas Department of Insurance
Life settlements are legal and regulated in Texas
Texas has a comprehensive life settlement regulatory framework under the Texas Department of Insurance. The state requires providers and brokers to be licensed, mandates full consumer disclosures, and maintains ongoing oversight of the secondary market to protect policyholders. Texas is one of the largest and most active life settlement markets in the country.
Texas's combination of a no-income-tax environment and one of the country's largest senior populations makes it one of the most active and advantageous states for life settlement activity. Many Texas policyholders stand to benefit significantly from exploring the secondary market for their policies.
Licensing Requirements in Texas
Life settlement providers and brokers in Texas must hold valid licenses from the Texas Department of Insurance. The licensing process is thorough, and licensees are subject to ongoing regulatory oversight and renewal requirements.
When working with LifeSettlementEstimate.com, you can be confident that we connect you only with licensed and vetted buyers and brokers who meet Texas'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 Texas
Texas requires that a life insurance policy be in force for a minimum of two years from the date of issuance before a policyholder may enter into a life settlement transaction. Texas recognizes exceptions for terminal and chronic illness and other qualifying life circumstances.
Consumer Protections for Texas Residents
Texas provides robust consumer protections for life settlement sellers, including mandatory written disclosures, a rescission period following contract execution, and strong oversight by the Texas Department of Insurance. These protections reflect the scale and importance of the life settlement market in Texas.
What Your Policy Might Be Worth in Texas
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 Texas 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 Texas
Texas has no state income tax, making it one of the most favorable environments in the nation for life settlement sellers from a tax perspective. Federal income taxes still apply to gains above the policy's cost basis. A federal tax advisor can provide guidance on your specific situation.
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 Texas 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 Texas?
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 Texas in cities like Houston, Dallas, and beyond, our platform offers a compliance-first approach — connecting sellers with licensed, vetted buyers who operate within Texas'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 TX buyers
Compliance-First
HIPAA-compliant, fully transparent process
A Texas Resident's Story
Margaret Longoria, 75
San Antonio, Texas
"Margaret, a retired Air Force administrator from San Antonio, had maintained a $500,000 whole life insurance policy for over three decades. As her estate plan evolved and her children became financially independent, she began questioning the value of continuing the premiums. Her estate attorney highlighted Texas's no-income-tax advantage for life settlement proceeds and encouraged her to explore the secondary market. Margaret visited LifeSettlementEstimate.com to get a no-obligation estimate as her first step."
This is a fictional illustrative scenario. It does not represent an actual client or guaranteed outcome.
Frequently Asked Questions — Texas
Get a Free Life Settlement Estimate in Texas
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 Houston and San Antonio residents who have already used LifeSettlementEstimate.com to make informed decisions about their life insurance.
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