What Are Viatical Settlements?
Viatical settlements are 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 and Policy Records Collection: At this stage, your policy and medical records are gathered in order to build your settlement profile
- Offer: We 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?
At Summit Life Settlements, trust is at the heart of everything we do. We understand that deciding to sell your life insurance policy—especially during a difficult chapter in life—is not just a financial decision, but a deeply personal one. Our mission is to simplify the life settlement market in order to provide compassionate guidance, clarity, and confidence every step of the way.
Compassionate Expertise
We recognize the emotional and financial challenges that come with serious health concerns or changing life circumstances. Our experienced team takes the time to understand your unique situation, providing honest advice and support without judgment.
No Fees or Pressure
We believe that every policyholder deserves the freedom to explore their options—without cost or commitment. Our process is completely transparent, allowing you to make an informed decision on your own terms.
Highest Payout Potential
As a trusted brokerage, Summit Life Settlements represents you—not the buyers. We secure multiple bids from top licensed institutional investors, ensuring you receive the most competitive offer available in the marketplace.
Confidential and Secure
Your privacy matters. Every detail of your policy and personal information is handled with the utmost care, confidentiality, and compliance. We maintain strict security standards so you can move forward with confidence and peace of mind.
Trusted Nationwide
Families and individuals across the country have turned to Summit Life Settlements for honest guidance and fair outcomes. Our reputation is built on integrity, transparency, and results—helping clients unlock the true value of their life insurance and achieve financial relief when it matters most.
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
1. What is a viatical settlement?
A viatical settlement is the sale of a life insurance policy by someone diagnosed with a serious or terminal illness to a licensed buyer for an immediate cash payment. The buyer becomes the new policy owner and beneficiary, taking over premium payments and collecting the death benefit when the insured passes away.
2. Who qualifies for a viatical settlement?
Typically, individuals with a life expectancy of two years or less due to a serious or terminal illness may qualify. Most policy types are eligible, including universal, whole, and convertible term life insurance policies.
3. How much can I receive for my policy?
The payout depends on factors like your policy’s face value, premium costs, and life expectancy. Generally, the amount is higher than the policy’s cash surrender value but less than the death benefit.
4. Is the money I receive from a viatical settlement taxable?
In most cases, proceeds from a viatical settlement are tax-free if the insured is terminally or chronically ill and the buyer is properly licensed under federal guidelines. However, it’s always best to consult a tax professional to confirm your specific situation.
5. What types of life insurance policies qualify?
Most individual, group, universal, whole, and convertible term policies can qualify — as long as they have a minimum face value (usually $100,000 or more) and meet underwriting requirements.
6. How long does the viatical settlement process take?
The process typically takes three to six weeks from application to funding, depending on how quickly medical records and policy documents are obtained.
7. Will my family still receive any benefits after the sale?
Once a policy is sold, the buyer receives the full death benefit. However, in some cases, a seller may choose to retain a portion of the death benefit (known as retained death benefits) as part of the settlement.
8. How is a viatical settlement different from a life settlement?
A viatical settlement is designed for those who are terminally or chronically ill, while a life settlement applies to seniors (typically 65+) who are generally healthy but no longer need their coverage. Viatical settlements often offer a higher payout due to shorter life expectancy.
9. Does selling my policy affect my eligibility for government benefits?
It can in some cases. Receiving a large lump sum may affect eligibility for Medicaid, SSI, or other need-based programs, so it’s important to consult with a financial advisor before proceeding.
10. Why should I use a viatical settlement broker?
A licensed broker, like Summit Life Settlements, can help you shop your policy to multiple institutional buyers, ensuring you receive the highest possible offer while guiding you through the entire process with transparency and compliance.