Viatical Settlements are a financial option for individuals with a terminal or chronic illness and a life expectancy of two years or less. This type of settlement allows policyholders to sell their life insurance policy to a third-party investor in exchange for a lump-sum cash payment, which can be used to cover medical expenses, living costs, or other financial needs.
Key Features of Viatical Settlements
- Eligibility: Typically available to individuals diagnosed with a terminal or chronic illness, with a life expectancy of 24 months or less. The policyholder must own a life insurance policy with a significant death benefit.
- How It Works: In a viatical settlement, the policyholder sells their life insurance policy to an investor in exchange for a one-time lump-sum payment. The buyer assumes responsibility for paying future premiums and will receive the full death benefit upon the policyholder’s passing.
- Benefits:
- Provides immediate cash to policyholders who need funds for medical treatments, hospice care, or other expenses.
- The lump-sum payment is often higher than the policy’s cash surrender value, offering more financial relief.
- Allows policyholders to access the value of their life insurance policy when it is no longer needed or affordable due to health issues.
Viatical settlements can be a life-changing financial solution, providing the necessary funds to manage the impact of a serious illness while improving quality of life during a difficult time.