Let Us Guide You Through Your Viatical Settlement
If you have a late-stage illness or other disease that puts you at an increased risk of death, you may feel like you don’t have many options. However, viatical settlements help to give patients facing a terminal illness a way to access money to help fund a variety of the costs associated with their condition. American Life Fund is proud to offer ill patients facing a variety of end of life circumstances the services they need to feel for financially stable as they approach the end of their life. If you are the owner of a life insurance policy and are looking for a life settlement, read on to see how we can help you and your family in your time of need.
What is a life insurance settlement?
A viatical settlement, also known as a life insurance settlement, is when a business such as American Life Fund gives you a cash value for your life insurance policy. Instead of waiting for the policyholder to pass away in order to claim the payout from their policy, a viatical settlement broker purchases the policy from you. This purchase can give you much-needed funds at your time of need, helping you to cover expensive treatments associated with a chronic illness late in life. If you wanted to wait to get everything as a lump sum from your insurance provider, you wouldn’t be able to access the money until the policy owner died. However, thanks to the life settlement industry, it’s easy to get a lump sum cash payout without waiting for the life of a person to end.
In order to qualify for a payment from a viatical settlement provider, you must first meet a few criteria. First of all, you must be the owner of the life insurance policy. If you aren’t insured, you won’t be able to receive the money as a life settlement or give your death benefits to a third-party. At this time, American Life Fund only services policyholders in the United States, so you must be a US citizen in order to use us as your viatical settlement company. Once you’ve submitted information about your insurance producer, life expectancy, and policy value to us for verification, all you need to do is wait for one of our agents to reach back to you to discuss your term policies. From there, we will offer you—as the life insurance policyholder—the cash surrender value of your policy. This number is usually a percentage of the policy’s death benefit, although the total value may depend on a variety of factors.
Once you’ve agreed to accept the cash surrender value of your policy, you’ll sign a written agreement with American Life Fund as your settlement provider. This goes over a variety of terms and conditions pursuant to the cash value of your policy’s death benefit, as well as the nature of your terminal illness or reason for cashing in your policy early. Your written agreement serves as the legal basis for your viatical settlement payout and a contract between you as the policyholder and the viatical settlement company.
Just like payouts from a life insurance company, with the sale of a life insurance policy, you will not be expected by the IRS to pay income tax by state law. This is something that some people rightfully get confused about, but remember that if you seek your insurance policy death benefits early from a broker, you will not need to pay income taxes just because you received funds from a third-party viatical settlement company instead of your insurance company.
Benefits of Viatical Settlements
Getting a viatical settlement payout can be a life-changing event for many individuals. Rather than having to ask for a loan from a family member or apply for a new credit card from a financial institution, a viatical settlement company will give you a quote and purchase your policy quickly and simply. This payout can be used for activities of daily living such as a trip on your bucket list or to cover hospital fees or medical expenses like surgery, prescriptions, or expensive treatment plans.
Getting rid of an individual policy can also open up a variety of other options for you, such as switching to a much less expensive group policy or at least lowering the cost of your monthly premiums. Staying insured as you approach old age and are in good health may not be the most financially prudent decision if future premiums seem like they’ll go up or you have been paying additional premiums for different benefits. It’s also worth noting that if your spouse has already passed away and there’s no other beneficiary, it may be worth seeking out a lump sum from a settlement provider rather than keep paying for your policy. If you do still have beneficiaries but they are in the process of paying for some of your medical or end of life care, it may still be a good idea to seek out a settlement provider so that they don’t continue to incur costs while you remain unnecessarily insured.
Life expectancy obviously plays a big role in many families’ decisions about whether or not to go through with a viatical settlement transaction or not. While selling your life insurance policy for a viatical settlement is the right decision for some individuals, others find that keeping their insurance policy makes more sense. Still, it never hurts to discuss your options with a broker. Sometimes when you factor in interest rates on your life insurance policy, you’ll be surprised at how a viatical settlement can help ease your finances by offering an accelerated death benefit. Rather than relying on advertising to form your opinion, reach out to us to discuss your situation and how a viatical settlement could fit into your end of life plans.
If you’re interested in investing more, talking to your financial advisor and other life insurance companies can help you determine whether or not a group policy is more beneficial for you and your situation. In these situations, your financial advisor may suggest that the cash payment you receive be used in investments rather than being spent on annual premium payments. Keep in mind that even if your advisor does reason a commission on your lump sum, they do have a fiduciary duty to provide you with accurate and helpful investment advice. This means that they will never pressure you into selling your policy’s death benefits to a viatical broker unless they truly believe that it’s in your best interest to forego payment of future premiums in lieu of another investment strategy.
Understanding the Viatical Settlement Process
When you choose American Life Fund, your viatical settlement transaction is a simple process consisting of three steps. That’s because we act as a broker between the policyholder and the insurance company in order to help you access a portion of your premium before you pass away.
It all starts by reaching out to us using our online form or by making a phone call to speak with one of our counselors. Whichever method you choose, the aim is to ensure that you are qualified for a life settlement. You will need to answer questions about the value of your insurance policy’s premium, as well as some personal information such as the cash value of your policy and medical diagnosis.
After submitting your application, your policy and medical records will be reviewed to confirm that you do qualify for the death benefits of your policy and are able to sell your policy to a broker. From there, an agent will reach out to you to discuss what value your life insurance policy is worth and what amount you can expect from your viatical settlement. The value is usually a portion of the premium that an insurance company would pay you. Having this accelerated death benefit is a value in and of itself, though, since you don’t have to wait for an insurance producer to give you the expected death benefit of the insurance policy, and can instead get your money immediately.
The viatical industry exists to help you and your family when you face difficult decisions at the end of your life. Insurance laws are constantly changing and have been for decades, so having a qualified business entity like American Life Fund that knows the ins and outs of how organizations like the National Association of Insurance Commissioners and even the supreme court feels about senior settlements. With a business entity acting as your underwriter, you will get the valuable consideration and collateral you need when seeking your viatical settlement. Don’t just rely on television advertising to make your decision. Talk to American Life Fund, a viatical settlement provider you can trust.