LISA Files Amicus Brief Highlighting Consumer Impact of Adverse Ruling Regarding Term Life Insurance Policies

Organization warns that restricting longstanding conversion practices could reduce policy value for seniors and disrupt the life settlement marketplace

WASHINGTON, May 15, 2026 /PRNewswire/ -- The Life Insurance Settlement Association (LISA), the nation's largest trade organization representing the secondary market for life insurance, today announced the filing of an amicus brief in Ameritas Life Insurance Corp. v. Wilmington Trust, National Association (No. 24-6801, 9th Cir.) concerning term conversion life insurance rights.

The brief addresses the significant consumer and market implications of restricting consumer rights found in many convertible term life insurance policies, including preventing the policy owner's ability to sell their policy in the life settlement marketplace. A life settlement allows a policyowner to sell an unwanted or unneeded life insurance policy for an amount greater than the cash surrender value offered by the insurer.

The filing explains that longstanding conversion rights are essential to preserving a healthy and competitive life settlement marketplace by retaining a critical component of the intrinsic value of the policy through the ability to convert the term policy before or after a sale. According to LISA, many life settlement transactions are economically feasible only because investors can continue to carry lower-cost term coverage and convert it later in life to a form of permanent insurance.

LISA states that if post-purchase conversion rights are restricted, fewer consumers will receive offers for their policies and many seniors, who are the primary beneficiaries of life settlement transactions, could lose the opportunity to realize meaningful value from policies they no longer need or can afford.

"Convertible term policies often represent one of the few opportunities seniors have to recover meaningful value from coverage that would otherwise be worthless if allowed to lapse," said Bryan Nicholson, executive director of LISA. "This case raises important questions about preserving the established market practices and contractual rights that help consumers realize the full value of policies they have paid into for years."

The brief also emphasizes that convertible life insurance policies have long operated within a well-established regulatory framework designed to promote consistency, consumer protections, and certainty in the insurance marketplace.

LISA argues that courts and the broader market benefit from a complete understanding of how converted policies work, including the contractual history and conversion rights consumers have relied upon for decades.

"Longstanding conversion rights have shaped how these policies are understood, regulated, and valued for decades," said Rob Haynie, chair of LISA. "Clarity and consistency in the legal framework benefits consumers, insurers, and the broader marketplace, and restricting conversion rights only serves to injure consumers."

Since 2020, the industry has paid consumers more than $4.5 billion for policies that otherwise would have been surrendered or allowed to lapse. LISA noted that courts and legislatures have long recognized the importance of preserving policyowners' ability to realize fair market value from life insurance assets through lawful secondary market transactions. 

About Life Insurance Settlement Association
Established in 1994, the Life Insurance Settlement Association ("LISA") is the oldest and largest trade organization in the life settlement market. LISA's membership consists of brokers, providers, financing entities, and service providers to the industry (law firms, medical underwriters, consultants, investment funds, actuarial firms, trustees and escrow agents). Members provide essential services to policy owners and industry participants. The life settlement industry is a dynamic marketplace representing the needs of life insurance policy owners and we are proud to serve as its leading voice.

To learn more, please visit LISA.org.

SOURCE Life Insurance Settlement Association