Business Owner Sells Keyman Policy for $290K After Exit
After selling his manufacturing company, a Pennsylvania business owner discovered his $2M keyman policy was still active — and the secondary market paid $290,000 for it.
The Situation
Richard (name changed) was a 71-year-old manufacturer in Lancaster County, Pennsylvania who had recently sold his business of 30 years. During the post-sale asset review with his CPA, they discovered a $2 million keyman universal life policy the company had owned on Richard's life — one that the acquiring company had no use for.
The acquiring company's CFO was about to simply surrender the policy for its $41,000 cash value. Richard's CPA flagged the situation and asked whether a life settlement might produce a better result.
According to the U.S. Small Business Administration, keyman policies are among the most commonly overlooked assets in business sale transactions. Accelerated LS provided a secondary market valuation that gave both parties a dramatically better outcome.
"My CPA saved me $249,000 with a single phone call. That policy was 10 minutes away from being surrendered for $41,000."
— Richard, Lancaster County PA, Age 71
How It Happened
CPA Identifies Policy
During the post-sale asset review, Richard's CPA identified the $2M keyman policy and flagged it as potentially undervalued before the surrender was processed.
Ownership Transfer Coordinated
We coordinated with both the seller's and acquirer's legal teams to transfer policy ownership and consent rights in preparation for the secondary market submission.
Market Submission & Bids
The policy was submitted to 12 buyers. The large face value and Richard's age and health profile attracted strong competing offers.
Proceeds Split Per Agreement
$290,000 in proceeds were distributed per the post-sale agreement, with Richard receiving the majority as the insured. The acquirer received a portion for their cooperation in the transfer.
Key Outcomes
Could You Qualify?
Business-owned life insurance policies — including keyman, buy-sell, and split-dollar arrangements — frequently become stranded assets after a business sale, ownership transition, or key employee departure. These policies are often excellent life settlement candidates and should be evaluated before surrender.
- You are 65 or older
- Premiums have become difficult to afford
- Your coverage needs have changed
- The policy is at risk of lapsing
- You need funds for healthcare or retirement income
According to the U.S. Small Business Administration, business-owned life insurance policies are common but often poorly managed after ownership transitions — and can be significant hidden assets.
Learn more about life settlement eligibility requirements or use our free policy value calculator to get an instant estimate.