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American Life Fund > Blog > Uncategorized > The Basics of Viatical Settlements

The Basics of Viatical Settlements

There are many things to consider before you start the viatical settlements process such as what exactly is a viatical settlement, what are the qualifications, and how do you apply for one? To make sure you have the best experience possible, make sure you learn these viatical settlement fundamentals.

What Are Viatical Settlements?

Viatical settlements refer to the sale of a policy owner’s existing life insurance policy to a third party for more than its cash surrender value, but less than its net death benefit. Such a sale provides the policy owner with a lump sum that can be used for a variety of expenses and in exchange, the third party becomes the owner of the policy. With a viatical settlement, you benefit from your policy’s value now instead of later.

How Do You Qualify for a Viatical Settlement?

There are many things that factor into a viatical settlement company’s decision to offer a viatical settlement. Here are some of the factors these companies take into consideration.

  • Your health – In order to be considered for a viatical settlement, you must have a life-threatening illness such as cancer, Alzheimer’s, or ALS.
  • The insurance policy’s death face value– Generally, you must have a life insurance policy of at least $100,000. There is no cap for the amount of the policy.
  • Your citizenship status – Typically, you must be a United States citizen in order to be considered for a viatical settlement, but you may be able to qualify as a legal permanent resident.
  • The rating of your insurance company – Viatical settlement companies want to be assured that if they buy out your policy, the insurance company that issued it will still be around and able to pay the policy in several years’ time. Because of this, they will only work with well-established, well-rated insurance companies.

How Do You Apply for a Viatical Settlement If You Qualify?

If you meet the qualifications and wish to proceed with the viatical settlement process, you need to find a licensed viatical settlement company. These companies have many rigorous policies they have to adhere to, and they must complete a licensing process and training. Make sure you choose a company with lots of experience with your health diagnosis and ideally, select a company with positive reviews and feedback from those who have used their services in the past.

You may want to get several different quotes from competing viatical settlement companies and compare them before you make a final choice. This is a big decision, and you deserve the best settlement possible.

 

Cashing in your life insurance policy for a viatical settlement can ease your financial hardships during an already emotional and trying time, so it is definitely something to consider if you meet all the qualifications.

To learn more or to instantly see if you qualify, contact us today at American Life Fund. We can help you get the funding you need to relieve financial stress and provide peace of mind during this difficult time.