At American Life Fund, we understand that a terminal cancer diagnosis can bring many challenges, including financial ones. If you need funds to pay for medical bills, living expenses, or other costs associated with your diagnosis, a viatical settlement may be an option. However, it’s important to understand the pros and cons of a viatical settlement and determine if it’s the right choice for your unique situation.
There is nothing easy about being diagnosed with a life-threatening illness.
Receiving a diagnosis inevitably impacts every aspect of one’s life, from the physical to the emotional, psychological, and financial. Caring for a serious illness is expensive—and many patients become worried about how to afford it. Many may even worry about what will happen to their family or loved ones due to their illness and the financial burdens it can cause.
Regardless of your motivations or needs, you might find yourself looking at various options for accessing cash to get you and your family through this trying time. One often-overlooked resource for funding is your life insurance policy.
A life insurance policy is considered an asset you own, meaning insurance policyholders can sell their life insurance for a lump-sum cash payment, also known as a viatical settlement.
Unlike life settlements, viatical settlements are designed for insurance policyholders with life-threatening illnesses, reduced life expectancies, or chronic health issues.
Here’s how it works:
Patients with life insurance policies can enter agreements with third-party buyers to sell their life insurance policy in return for a lump-sum cash settlement (more than the cash value of the life insurance policy but less than the death benefit).
The life settlement company takes over by paying the monthly insurance policy premiums and receives the death benefit after the seller’s passing.
Additionally, with a viatical settlement, the funds are tax-free and non-regulated, meaning YOU decide how they are spent.
Not only can you pay towards your medical expenses, the cost of living expenses, or even a luxurious vacation with your loved ones. As the settlement holder, the freedom and the choice are uniquely yours!
But what are the cons? Here’s our list of pros and cons of a viatical settlement.