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What is a Viatical Settlement?

Viatical settlements allow someone diagnosed with a life-threatening illness to sell their life insurance policy for cash. This person is known as the “viator.”

The third party they sell their policy to is an institutional investor, usually a viatical settlement company such as us here at American Life Fund.

A life insurance policyholder with a severe illness (viator) enters into a legally enforceable agreement with a viatical settlement company to exchange their life insurance policy for cash.

How Does a Viatical Settlement in California Work?

The viatical process begins when a policyholder contacts a viatical settlement firm such as American Life Fund. After an initial consultation, the viator will apply.

Our underwriters evaluate every application they receive and check the accuracy of the information given by the applicant.

If your case is approved, we will ask you to sign contracts making the viatical company the new policy owner and beneficiary.

You will receive the agreed-upon offer as a lump sum cash payment. The entire process can take as little as two weeks from start to finish.

Viatical Settlement in California

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Who Is Eligible For A Viatical Settlement in California?

Policy Type

Life insurance policies of all types may be purchased. However, to sell a policy acquired through an employer, the insured must be separated from their employer or approaching separation.

Policyholder Health

For the policyholder to be eligible for a viatical settlement, they must have been diagnosed with a life-threatening illness such as cancer or ALS.

The Value Of The Life Insurance Policy

The life insurance policy’s death benefit must be a minimum of $100,000.

The Age Of The Life Insurance Policy

The life insurance policy must have been in place for at least two years.

Benefits of a Viatical Settlement in California

There are several advantages to completing a viatical settlement.

Some benefits include:

  • The process is quick
  • No medical exams are required
  • You can use the money however you want
  • You can pick the settlement firm you wish to work with

If you are a Californian looking for assistance with your life insurance policy, American Life Fund can help. We have extensive experience in the viatical settlement industry and have helped many people through tough times.

Viatical Settlement in California

How are Viatical Settlement Payments Determined?

Viatical Settlement in California

The payout you receive from a viatical settlement is based on several factors, including but not limited to:

  • The death benefit of your life insurance policy
  • Your health condition
  • The type of life insurance policy you have

These are just a few of the factors that will affect your payout. For an accurate and free quote, call us at 877-297-4592, and one of our expert representatives will be more than happy to help you.

The Pros And Cons Of A Viatical Settlement

Are you unsure whether a viatical settlement is the best option for you or your loved one? Here are some questions to ask yourself before deciding.

Pros:

  1. You’ll get a one-time payout much higher than the cash surrender value through a viatical.
  2. Help pay for medical expenses such as medical premiums, treatment, or long-term care.
  3. Use your money for better care, travel, or anything else that would make you happier.
  4. With a viatical settlement, you can stop making premium payments. The new owner, i.e., the viatical settlement company, will take over those responsibilities. They will also be in charge of any other maintenance costs.

Cons:

  1. Government assistance programs such as Medicaid are need-based programs based on your income and assets, so you may lose eligibility if your finances improve.
  2. Beneficiaries won’t be able to receive the death benefit from your life insurance policy unless you choose to give them part of your viatical settlement payout.

Viatical Settlement Examples

Here are a few examples of how people have utilized their viatical settlement payments:

  • Susan had a life insurance policy with a $250,000 death benefit. She received $150,000 and used the money to pay for her medical expenses and treatments.
  • Bill had a life insurance policy with a $100,000 death benefit. He received $60,000 and used the money to pay off his debts.
  • Tom had a life insurance policy with a $500,000 death benefit. He was diagnosed with terminal cancer and decided to enter a viatical settlement. He received a payout of $300,000 and used the money to travel and spend time with his family members.

As you can see, viatical settlements can benefit seriously ill people who need financial assistance.

Viatical Settlement vs Life Settlement

Viaticals and life settlements are two separate transactions, even though you may hear the term “viatical life settlement” used interchangeably. A life settlement shares some similarities to a viatical settlement, but there are several key distinctions between the two.

How do life settlements work?

  • A life settlement is a transaction that occurs when an individual over 75 sells a life insurance policy to a settlement provider for cash, usually yielding considerably more than the policy surrender value.
  • Many people are unaware they can sell their life insurance policy for cash. When a policy becomes too expensive or unnecessary, the owner typically lets it lapse without knowing there is another option—the life settlement market.
  • The size of a life settlement payout is mostly determined by the policyholder’s health status and the policy’s premium payments. The money from selling life insurance policies can be used to finance long-term care, medical procedures, travel, or family events.
Viatical Settlement in California

Alternatives To Viatical Settlements

Are you unsure whether a viatical settlement is appropriate for you? Here are some more alternatives to explore if a viatical settlement isn’t right for you:

Surrendering the policy

You can cancel your life insurance policy and receive the cash surrender value. This is usually a bad idea because you will get less money than if you had sold the policy in a viatical settlement.

Although viatical settlements offer many benefits, they aren’t the only form of financial assistance available. Be sure to speak with a professional before making any decisions.

Withdrawals

You can withdraw from the cash value of your life insurance policy, but this will reduce the death benefit paid to your beneficiaries.

Is a Viatical Settlement Right For You?

With life insurance policies becoming more common, it’s essential to consider all choices before making a decision. For those with an ongoing or terminal illness – selling your policy may be one way to get money for quality care. All while still having extra funds to help you improve your quality of life.

Give us a call at 877-297-4592 or complete our simple online form if you or a loved one are interested in a Viatical Settlement in California.

Get a personalized Viatical Settlement estimate.

We will get you the best possible offer for your policy.