American Life Fund > Viatical Settlements vs. Life Settlements

Viatical Settlements vs. Life Settlements

Sometimes, people are confused on the differences between a life settlement and a viatical settlement. To help you make your decision about whether either of these options are right for you, we’ve put together a brief guide on the differences between life settlements and viatical settlements. Here’s what you need to know.

What Is a Life Settlement?

A life settlement is when someone, usually a senior-aged individual, sells their life insurance policy to a company. The insured receives a lump sum payment and the company becomes the owner of the policy. Then, the company continues to make payments on the policy, and ultimately they receive the payout from the life insurance.

What Is a Viatical Settlement?

A viatical settlement is when someone with a life-threatening illness sells their life insurance policy to a company. Again, in this situation, the company becomes the owner of the policy and the insured receives a payout for the policy.

What Is the Difference Between a Life Settlement and a Viatical Settlement?

The definitions above look pretty similar, and they are. But, there are very important distinctions between them. Viatical settlements are reserved for people who have a serious medical diagnosis. Examples of this include someone diagnosed with cancer, ALS, or Alzheimer’s. In contrast, with a life settlement, you don’t necessarily need to be ill, but you typically need to be over the age of 70.

Generally, viatical settlements payouts tend to be larger, due to their specialized nature. Viatical settlements are also completely free of income tax. When you receive the settlement, you get to keep the whole thing. In contrast, you may have to report the funds you receive from a life settlement as income on your tax return.

Should You Get a Life Settlement or a Viatical Settlement?

If you are over the age of 70 and need additional funds to help with your retirement or any other expenses you have, you may want to talk with a life settlement company. They can give you an offer that may be more valuable than surrendering your policy to the carrier.

However, if you have cancer or another life-threatening illness, and need help with finances such as medical bills, loss of income, or any other expenses you may have, you should pursue a viatical settlement.

Who Can Help?

Once you’ve determined what type of settlement fits your situation, you need to find the best company to work with. Some companies specialize in life settlements while other entities focus solely on viatical settlements. Some companies specialize in both types of settlements.

At American Life Fund, we have extensive expertise in both settlement types. We have helped hundreds of individuals with life-threatening illnesses to sell their life insurance policy for immediate funds. Additionally, we have helped countless senior-aged individuals to sell their life policy for cash.

To learn more about how we can help, contact us today at 877-960-2352 or fill out our simple form to see if you qualify for a settlement.