It is legal for someone to sell their life insurance policy?
Yes. The legal basis for the secondary market in life insurance started in 1911 with the U.S. Supreme Court case of Grigsby v. Russell (pg. 3). With this case it was shown that life insurance had all the legal qualities of property which meant that life insurance could also be transferred in similar manners. Grigsby v. Russell set the rights that a policy owner could name the beneficiary, borrow against it, sell the policy and change the beneficiary. Third Party Confirmation U.S. Supreme Court Case of Grigsby v. Russell