Viatical Settlement FAQs: Answers to Common Questions

A viatical settlement lets you turn your life insurance policy into immediate cash when you’ve been diagnosed with a terminal or chronic illness. It gives you access to money now, when it matters, without taking on debt or waiting until your family collects the death benefit.

The money is yours to use however you want. Treatment. Bills. Time with the people you care about.

It’s your policy. This lets you finally use it as the asset it was meant to be.

We work with clients facing serious illnesses that reduce life expectancy. That includes Stage III/IV cancers, ALS, advanced organ failure, and degenerative diseases. We don’t use a fixed cutoff. Each case is reviewed based on real factors.

See qualifying medical conditions

A life insurance policy can be a powerful financial asset, especially when treatment costs, time off work, or household expenses start adding up.

For many, a viatical settlement provides a way to:

• Avoid debt
• Access funds during treatment
• Pay for caregiving, travel, or quality time with loved ones
• Use the value of the policy while they’re still here to benefit from it

In most cases, no. Under the Health Insurance Portability and Accountability Act (HIPAA), viatical settlement proceeds are typically not subject to federal income tax when the insured is terminally ill, as defined by law. However, we recommend speaking with a tax advisor to confirm any state-specific implications.

More on viatical settlement taxation

A viatical settlement is for individuals with a life-threatening or terminal illness who need access to the value of their life insurance policy right away.

A life settlement, on the other hand, is typically for older adults in relatively good health who no longer want or need their policy. Life settlements generally offer smaller payouts because the insured’s life expectancy is longer.

See the full comparison of viatical vs. life settlements

You may qualify if you have a life insurance policy valued at $200,000 or more and have been diagnosed with a terminal or chronic illness. Age doesn’t disqualify you, and you won’t be asked to take a medical exam. We work with individuals facing serious conditions like Stage IV cancer, ALS, and end-stage organ failure.

See full eligibility requirements

Some clients receive up to 70% of their policy’s face value. For example, a $500,000 life insurance policy could result in a $350,000 cash payment, depending on policy type, premium costs, and condition.

This money is yours. Spend it on treatment, travel, family, or just peace of mind. We’ve helped thousands turn their policy into meaningful financial relief.

Applying for a viatical settlement with American Life Fund is a painless process. We will either email or send you a printed copy of our application forms, whichever you prefer.

Once you have completed them, you can mail the application forms back to our home office at 3295 River Exchange Drive, Suite #350, Norcross, GA, 30092. You can also scan and email the completed forms to us. Lastly, you may fax the forms to (855) 727-4663. Once the forms are received, a financial counselor will contact you within 24 hours.

Minimal. We don’t believe in paperwork marathons. Once we receive your policy and basic medical information, we handle the heavy lifting, contacting your insurance company, tracking down documents, and managing the process from start to finish.

Your part is simple, and our team stays in touch every step of the way.

Most clients receive their cash payment in 1 to 2 weeks. Delays are rare and usually caused by slow responses from doctors or the insurance company. We track everything and follow up aggressively so you don’t have to.

See how the process works

We work with many types of life insurance, including:

• Term life insurance
• Whole life insurance
• Universal life
• Group policies
• FEGLI policies (Federal Employees’ Group Life Insurance)

To qualify, your insurance policy must have a face value of $200,000 or more, and the insured must be diagnosed with a terminal illness or chronic illness.

Your offer is based on the policy’s death benefit, your health status, remaining insurance premiums, and the presence of any cash value.

We assess each policy individually, there’s no one-size-fits-all formula. You won’t be compared to averages. You’ll be evaluated on what your policy is truly worth today.

No. Once the sale is underway, premium payments become our responsibility. You stop paying, and there’s no risk of the policy lapsing on your end.

Most policies we purchase are $200,000 or more. This level typically unlocks higher offers and makes the process more efficient. If you’re unsure what your policy is worth, we can help you find out.

Yes. Clients with a chronic illness may still qualify, especially when the condition significantly affects life expectancy or quality of life. We review each application carefully. If you’re unsure, it’s always worth checking via our free online estimate or give us a call on (877) 261-0632.

You sign the agreement. We submit documents to your insurance company to transfer ownership.

Once the policy’s death benefit is reassigned, your large lump sum cash payment is released by wire or check.

You can walk away at any point before closing documents are signed. There’s no fee, no penalty, and no pressure. By law, you have up to 15 days after signing to change your mind.

Yes. Once sold, your life insurance policy no longer pays out a death benefit to your former beneficiaries. Instead, you receive immediate funds to use however you choose, often a better fit for your current needs.

Read about estate planning with viatical settlements.

Yes. Many clients use their payout to cover treatment costs, medications, travel to specialists, or alternative care not covered by insurance. There are no restrictions. If it matters to your health, you can pay for it.

A viatical settlement helps eliminate or reduce medical debt quickly if you choose to. Hospitals and providers are often willing to settle outstanding bills once you’re able to pay in full. Some clients use their life insurance policy to negotiate discounts or secure private treatment they couldn’t access before.

Absolutely. We’ve seen clients use funds for caregiving support, home modifications, time with family, and even end-of-life planning. The point isn’t just to survive, it’s to take back control.

This is money you can use how you want. No restrictions. No approvals. No strings.

Not negatively. If your condition changes after your application is submitted, it does not delay or complicate your payout. In some cases, it may even improve your offer. Our team moves fast for a reason, so your timing is protected, no matter what comes next.

Yes. A viatical settlement is often the next step after savings, credit, or outside help have run dry. It’s a way to stop taking on debt and start using an asset you already own.

We work with people who’ve been through GoFundMes, loan denials, and long waits for charity grants. You don’t need approval. Just a policy.

When facing a terminal illness or chronic illness, some turn to:

• Crowdfunding
• Disability benefits
• Loans
• Accelerated death benefits
• Medical grants and nonprofit support

While each may help in some way, few offer the liquidity, speed, and control that a viatical settlement provides. With American Life Fund, your life insurance policy becomes a real financial tool, one that doesn’t rely on donations, debt, or delays.

Crowdfunding can work, but it’s unpredictable. Success depends on reach, timing, and public response. Most campaigns raise only a fraction of what’s needed, and often too late.

A viatical settlement delivers a cash payment based on your policy’s face value, not public generosity. There’s no limit on how you use the funds, and no delay once you’re approved.

Loans may offer short-term relief, but they come with long-term financial stress, especially when combined with rising medical costs. Repayment terms, interest, and credit checks add pressure.

A viatical settlement is not a loan. There’s no cost, no debt, and no insurance agent selling you on terms you don’t need. It’s your money, from a policy you already own.

Not quite. An accelerated death benefit lets you access a portion of your death benefit through your insurer. But limits are common, often 25–50% of the policy’s face, and approval takes time.

Viatical settlements offer up to 70%, based on the insured’s life expectancy, future premiums, and cash surrender value. They’re also handled independently, with fewer restrictions.

Many clients come to American Life Fund after dealing with nonprofits, public programs, and private lenders. Our guide to financial assistance organizations shows what’s out there and why a viatical settlement often fills the gap.

American Life Fund is a viatical settlement company that helps individuals facing a terminal or chronic illness, such as cancer or ALS, access immediate financial relief by selling their life insurance policy. Instead of letting your policy’s death benefit go unused, you will receive a lump-sum cash payment from your policy within weeks.

We specialize in working directly with clients, which means no broker fees, faster turnaround, and more money in your hands. You can learn more about how we help or get a free life settlement estimate here.

Unlike many others, American Life Fund specializes exclusively in viatical settlements for individuals with life-threatening illnesses. That means our underwriting team understands the nuances of your health status, and our offers are tailored to your specific needs, not generic formulas.

We also avoid third-party markups, which affects your final offer. You get a higher payout, personalized service, and a faster process. Learn more about why we’re different.

Yes. We take your privacy seriously. All personal, medical, and financial information is kept strictly confidential and is only shared with your written consent or when legally required.

Your decision to sell your life insurance policy is deeply personal, and we are committed to providing a respectful, secure experience throughout the viatical settlement process.

You can begin with a free, no-obligation estimate. Simply visit our qualify page and enter basic information such as your age, policy’s face value, and diagnosis.

We’re available 24/7. Give us a call or send us an email to find out how we can help you today.

(877) 261-0632 | info@americanlifefund.com

Once submitted, a dedicated counselor will reach out to guide you through your options, answer your questions, and support you at every step.

In some cases, yes. Having an outstanding loan doesn’t automatically disqualify you, but it could affect how your offer is calculated. We’ll review your life insurance and let you know what’s possible based on the remaining face value and structure.

No. Your tax status is based on your diagnosis at the time of the sale. That said, you should always consult a tax professional if you’re dealing with complex health records or multiple income sources.

Yes. Many clients prefer to complete the application verbally. We’ll walk through everything step by step, no paperwork marathons, no guesswork. Our team is committed to making a positive impact on the lives of those we serve.

No. This is your policy, and you’re the policy owner. Unless you ask us to, we don’t involve your original insurance agent or their office in the process. Everything goes through our internal team.

Selling one policy doesn’t stop you from applying for another, especially if your diagnosis changes. That said, some new applications may ask if you’ve sold coverage before. It’s best to consult a financial advisor if you’re planning ahead long-term.