What Is a Viatical Settlement?
A viatical settlement is a financial arrangement where someone with a life-threatening or chronic illness sells their life insurance policy to a third party in exchange for a lump sum cash payment. The buyer becomes the beneficiary and assumes future premium payments.
This allows individuals to unlock immediate funds rather than letting the policy lapse or waiting for the death benefit payout.
Viatical Definition and Core Purpose
The term “viatical” comes from the Latin viaticum, meaning “provisions for a journey.” In this context, it refers to financial support for those navigating serious health challenges.
Viaticals are intended for individuals diagnosed with terminal (life expectancy of two years or less) or chronic illnesses, focusing on health conditions rather than age.
Viaticals vs Life Settlements: What’s the Difference?
| Feature | Viatical Settlement | Life Settlement |
|---|---|---|
| Eligibility | Terminal/chronic illness | Typically age 65+ |
| Tax Implications | Often tax-free (for terminal illness) | May be taxable depending on cost basis |
| Motivation | Urgent medical/living costs | Retirement planning, policy no longer needed |
| Policy Types | Whole, universal, or convertible term | Same |
The Viatical Settlement Process
- Free Policy Evaluation: Submit basic policy and health info. No obligation or cost.
- Medical Review & Offer: We review your records and secure offers from licensed buyers.
- Accept or Decline: Review the offer with loved ones or advisors. No pressure to accept.
- Close & Receive Funds: Once finalized, you receive your cash—usually within weeks.
Why Consider a Viatical Settlement?
- Cover medical treatments or experimental therapies
- Pay for in-home care, hospice, or long-term support
- Eliminate debt and ease family burdens
- Create meaningful experiences with loved ones
- Maintain independence during late-stage illness
Who Qualifies for a Viatical Settlement?
General eligibility requirements include:
- Diagnosis of terminal or chronic illness
- Life insurance policy valued at $100,000 or more
- Policy active for at least 2 years
- Policyholder is of sound mind and gives consent
How Much Is My Policy Worth?
Your policy’s cash value depends on:
- Face value of the policy
- Your life expectancy
- Premium costs and policy type
- Market demand among buyers
Use our free evaluation service to learn your policy’s true value.
Viatical Settlement Meaning in Simple Terms
A viatical settlement is about financial dignity. It gives people the option to access life insurance value now—on their own terms—when it matters most.
Rather than forfeiting benefits to an insurer, viaticals return control to the individual.
Why Trust Summit Life Settlements?
- Compassionate expertise: We understand the emotional and financial challenges involved.
- No fees or pressure: Explore your options at no cost.
- Highest payout potential: We compare offers from multiple licensed buyers.
- Confidential and secure: Your information and dignity are always protected.
- Trusted nationwide: We’ve helped countless families find peace of mind.
Final Thoughts
Facing a serious illness is hard enough—financial stress shouldn’t make it harder. If you or someone you love owns a life insurance policy and is navigating a terminal or chronic condition, a viatical settlement could provide comfort, freedom, and support.
Summit Life Settlements is here to make sure your policy works for you—not just your insurer. Let us help you understand your options, advocate for your value, and walk this path with dignity.
FAQs About Viatical Settlements
In most cases, no. If the policyholder is terminally ill and meets IRS guidelines, the payout is tax-free. Consult your advisor for personalized guidance.
Absolutely. There are no restrictions. It’s your money—to cover medical expenses, housing, care, travel, or anything else you need.
Most viatical settlements are completed within 2 to 4 weeks, depending on responsiveness and document processing.
Yes. You are never obligated to accept an offer until final documents are signed.
Yes, with proper legal authority or power of attorney.
