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Permanent Estate Tax Breaks Will Fuel a New Wave of Life Settlement Sales — Here’s Why Policy Audits Matter More Than Ever
July 2025
With the passage of the One Big Beautiful Bill Act the estate planning landscape has dramatically shifted as potentially permanent — and with it, the future of many life insurance policies.
Under the new law, the federal estate tax exemption is permanently locked in at $13.61 million per individual and $27.22 million per married couple (Internal Revenue Code §2010(c), as amended by H.R. 7024, 2025). For thousands of wealthy families, this eliminates the primary reason they purchased large permanent life insurance policies in the first place: estate tax liquidity.
Unneeded Policies, Untapped Value
Now, a growing number of trust-owned and individually held policies are being reevaluated — not for coverage, but for cash. And the life settlement market is ready.
Seniors with policies no longer needed for estate planning are discovering that the secondary market may offer payouts significantly higher than surrender values — in some cases, 4–10 times more. As this awareness grows, life settlement transactions are expected to surge, creating a potentially historic wave of policy monetizations.
Why Policy Audits Are Critical Now
This shift makes comprehensive life insurance audits more important than ever. But a true 2025-era audit should go beyond basic illustrations. Key elements should include:
- Reduced Death Benefit Modeling – Reviewing whether the policy can be downsized to cut premiums and extend longevity.
- Life Settlement Market Valuation – Getting a third-party estimate of the policy’s current market value to understand real monetization potential.
- Carrier Performance Checks – Identifying policies with underperforming cash value growth or rising COI charges.
Many clients are unaware their policy is an asset — one that could be sold or restructured instead of surrendered or allowed to lapse.
The Bottom Line
With permanent estate tax relief now the law, many large insurance policies have become obsolete — but not worthless. In fact, they may be more valuable than ever.
Advisors and policyholders alike should treat this moment as an opportunity: Audit every policy. Explore every option. Know the market value. Because the gap between a policy’s surrender value and its market value can be life-changing.
To take full advantage of this market shift, advisors should partner with experts. Abacus Life offers cost-free policy valuations with no obligation. All that’s needed is a current in-force illustration, and pricing is typically provided within 24 to 48 hours.
To read the full details of the bill click here.
