How Does a Viatical Settlement Company Determine My Offer?
When an individual considers selling their life insurance policy for cash, also known as a viatical settlement, many times their first question is ‘how much will I receive for my policy?’ Various factors are taken into consideration when a viatical settlement company determines the value of an individual’s life policy. Here are the factors that affect your policy’s worth.
The Health of the Policy Owner
When a viatical settlement company evaluates your policy value, one of the first items they examine is your medical status. They may ask what your diagnosis is and the stage of that diagnosis. They will also ask for medical records to verify this information. This is because your health condition is used to determine your projected life expectancy. This number is used when calculating the offer amount. Typically, the lower the projected life expectancy, the higher the offer amount.
Your Policy Details
Life insurance policy types include group, term, whole, and universal policies. Each policy type has its own nuances. Here are the main policy type factors that affect your bottom line.
A non-convertible term policy is a policy that expires and cannot be renewed or exchanged for a permanent policy, and therefore, is an added risk to a potential purchaser. On the other hand, term policies that are convertible will have a deadline for when the conversion must be completed. Also, term policies with 1-2 years left on the policy can be considered too risky to purchase. With group policies, or life policies issued through your employer, the policyholder usually needs to be separated from the employer or retired in order to sell their policy. Depending on these factors, a viatical settlement company may be unable to purchase these types of policies or may lower the offer amount due to the associated risks.
Premium amounts vary across policy types. Term policies have the most affordable premiums, allowing for a higher offer amount. Whole life and universal policies tend to have higher premiums which may decrease the offer. Any policy that has a return of premium, premium waiver, or is a ‘paid up policy’ means the premiums are paid for, and therefore, increases the offer amount for the individual. Whatever type of policy you have, it’s important to read through your policy details to understand the capabilities and limitations of your policy.
The Viatical Settlement Company You Choose
The last factor that can heavily impact how much you get for your life insurance policy is what company you choose to work with. If you work with a viatical settlement broker, a significant part of your offer will be used to pay the broker fee. However, if you work directly with a company, there are no third-party fees which means more money in your pocket.
American Life Fund is an industry-leading, national viatical settlement company. We work with you directly to get you the highest possible offer for your policy. If you want to see how much you can get for your policy, contact us directly at 877-226-9836 or get your instant estimate using our payout calculator.