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What is a Viatical Settlement?

American Life Fund > What is a Viatical Settlement?

What is a Viatical Settlement?

It’s quite possible that you’ve never heard of the term “viatical settlement” until this very moment. That’s because viatical settlements, while not uncommon, aren’t widely discussed.

LUMP SUM CASH PAYOUT

A viatical settlement takes place when the insured of a life insurance policy (also known as the viator) sells their life insurance policy to a third party (the viatical settlement provider) for a lump sum cash payout—this payout is less than the death benefit, but more than the cash surrender value.

The buyer then becomes the new life insurance policyholder, pays future premiums, and collects the death benefit with the viator passes, as the sole beneficiary.

FINANCIAL PEACE OF MIND

Many people have no idea what a viatical settlement is or how a viatical settlement can provide financial peace of mind. The sale of a life insurance policy is a viable solution for individuals who are facing financial hardships, particularly those who are dealing with serious, terminal illnesses.

If you’re struggling to pay your medical bills or need to pay for long-term medical care, selling your life insurance policy could relieve you of your debt or financial obligations relating to additional premiums. Read on for an in-depth walk-through of how to sell your life insurance policy for cash.

Who Qualifies for a Viatical Settlement?

According to the National Association of Insurance Commissioners, any individual who has a chronic illness (defined as a condition that affects the activities of daily living) and an existing life insurance policy may qualify for a viatical life settlement. All policy types are accepted including whole, term, group, and universal.

Each life settlement company takes various factors into account including the type of disease, the stage the disease is in, the type of policy you have, the policy’s face value, insurance premiums, and other relevant information. They use these factors to calculate the offer amount presented to the patient.

How Can You Use a Viatical Settlement Cash Payment?

Here’s the good news — there are absolutely no restrictions on the cash payment you receive from your settlement. Once you have the funds, you can use them exactly as you like.

100% FREEDOM WITH VIATICAL FUNDS

Here are just a few of the ways that people decide to use their payout:

  • Take a trip with their family
  • Cover their wages so they can quit their jobs or take time off
  • Allow their family members to take time off work
  • Pay off medical bills
  • Pursue additional treatment
  • Pay for experimental cancer treatments, not covered by insurance
  • Travel to receive medical care
  • Pay for home care or hospice
  • Get extra help around the house with cleaning, childcare, etc
  • Reimburse family members for their care
  • Reduce other debts
  • Pay off their home mortgages
  • Pay for college tuition, or set aside college funds

Remember, Viatical settlement funds can be used however you want, without restriction.

How Quickly Can I Get a Viatical Settlement?

You can get a viatical settlement within days, and then you can use your viatical payout however you choose. The process is quick and easy, and we can guide you through it.

STEP 1: FREE ESTIMATE

First, get a free estimate. Then talk with one of our counselors about your questions or concerns, and decide if you want to complete our easy 3-step settlement process.

STEP 2: TWO-PAGE APPLICATION

You submit a short, two-page application along with any medical records or life insurance policy information you have on hand. Then, the viatical company or broker reviews and verifies this information.

STEP 3: REVIEW OFFER

Once confirmed, the viatical broker or company presents you with an offer for your policy. If you accept the offer, you sign and send back the final paperwork.

STEP 4: ACCEPT PAYOUT

Within days, the company becomes the new policy owner and you receive a large lump sum for your policy.

USE FUNDS AT YOUR DISCRETION

You are no longer responsible for the insurance premium payments and can use your payout however you choose. It’s that simple.

How are Viatical Settlements Different from Other Cancer Financial Resources?

Who Provides Viatical Settlements

Viatical settlements are usually done through either a viatical settlement company or a viatical settlement broker.

VIATICAL SETTLEMENT COMPANIES

Aviatical company is an organization that’s licensed to purchase life insurance policies directly from the insured.

VIATICAL SETTLEMENT BROKERS

A viatical settlement broker is an individual who negotiates on behalf of the insured to secure an offer.

Another key difference is that a viatical settlement broker normally charges the insured an applicable fee to help negotiate an offer, while working directly with a viatical settlement company avoids this cost.

Is it Legal to Sell My Life Insurance Policy?

Yes! Your life insurance plolicy is considered an asset that you own, like any other asset that you have. It is at your sole discretion to keep it, sell it, declare beneficiaries, etc.

THE CASE THAT SOLIDIFIED YOUR RIGHT TO SELL

The legal basis for life settlements as a legitimate, legal transaction for life insurance owners can be found in the “Grigsby v. Russell” case.

In the case of “Grigsby v. Russell,” doctor A.H. Grigsby had an ill patient named John C. Burchard who required a special and expensive operation. In hopes of avoiding a financial hole, he volunteered to sell his own life insurance policy to the doctor for $100, if he agreed to pay the remainder of the insurance policy premiums. Dr. Grigsby agreed and that’s how Burchard became the first person in history to successfully sell a life insurance policy for a cash payout.

One year later, Dr. Grigsby tried to acquire the insurance policy’s death benefit when Burchard passed away, but an executor took the case to court and won. This case eventually ended up in the Supreme Court. Ultimately, Justice Oliver Wendell Holmes, an Associate of Justice of the Supreme Court, described life insurance as property, which meant it could be transferred to a third party by the viator, according to the insurance laws.

THE RISE OF VIATICAL SETTLEMENTS

Although viatical settlements have been around for quite some time, many life policyholders are unaware of the financial benefits a viatical settlement can provide to an individual policyholder or loved one.

This type of transaction became popular in the ’80s as more people with terminal illnesses had life insurance policies they didn’t need. This led to what we now know as the viatical industry—when seniors or individuals who are terminally ill can sell their insurance policy for immediate access to their funds.

Why Should I Get a Viatical Settlement Estimate?

Overall, viatical settlement transactions are a great option for cancer patients because it provides the level of financial assistance needed without any costly fees or interest rates.

ROOM TO FOCUS ON WHAT MATTERS

Financial stress can get in the way of healing and when your finances are more settled, you can truly focus on recovery and spending extra time with your family.

We hope this guide helps answer the “What is a viatical settlement?” question for you. If you would like to learn more about the viatical settlement process and see if you qualify for one, read more about the process.

ESTIMATES ARE FREE, NO OBLIGATION

At American Life Fund, we are committed to helping our clients get the funds they need as quickly as possible. If you’d like to speak with one of our caring and dedicated counselors, please call us at 877-297-4592.

Wondering if you qualify for a viatical settlement? Find out instantly by using our simple online form now.

Viatical Settlements vs. Senior Settlements – How are they Different?

There are two different types of life settlements—senior settlements and viatical settlements.

SENIOR SETTLEMENTS

A senior settlement, also known as a life settlement, is a transaction through which the owner of a life insurance policy sells his or her policy to a buyer or third party life settlement broker in exchange for a cash settlement that can almost quadruple the amount of the policy owner’s cash surrender value.

Note: Senior settlements are usually owned by people who are in their Golden Age or 70 and older.

VIATICAL SETTLEMENTS

The second kind of life settlement is a viatical settlement. A viatical settlement is when a policyholder with a terminal illness sells their life policy to a third party at a discount from its cash value for an immediate payout.

The main difference between a viatical settlement and a life settlement is that a viatical settlement is reserved for those who are terminally ill—individuals who have a two-year life expectancy, and are seeking additional financial empowerment.

What is a Viatical Settlement?

It’s quite possible that you’ve never heard of the term “viatical settlement” until this very moment. That’s because viatical settlements, while not uncommon, aren’t widely discussed.

LUMP SUM CASH PAYOUT

A viatical settlement takes place when the insured of a life insurance policy (also known as the viator) sells their life insurance policy to a third party (the viatical settlement provider) for a lump sum cash payout—this payout is less than the death benefit, but more than the cash surrender value.

The buyer then becomes the new life insurance policyholder, pays future premiums, and collects the death benefit with the viator passes, as the sole beneficiary.

FINANCIAL PEACE OF MIND


Many people have no idea what a viatical settlement is or how a viatical settlement can provide financial peace of mind. The sale of a life insurance policy is a viable solution for individuals who are facing financial hardships, particularly those who are dealing with serious, terminal illnesses.

If you’re struggling to pay your medical bills or need to pay for long-term medical care, selling your life insurance policy could relieve you of your debt or financial obligations relating to additional premiums. Read on for an in-depth walk-through of how to sell your life insurance policy for cash.

Who Qualifies for a Viatical Settlement?

According to the National Association of Insurance Commissioners, any individual who has a chronic illness (defined as a condition that affects the activities of daily living) and an existing life insurance policy may qualify for a viatical life settlement. All policy types are accepted including whole, term, group, and universal.

Each life settlement company takes various factors into account including the type of disease, the stage the disease is in, the type of policy you have, the policy’s face value, insurance premiums, and other relevant information. They use these factors to calculate the offer amount presented to the patient.

How Can You Use a Viatical Settlement Cash Payment?

Here’s the good news — there are absolutely no restrictions on the cash payment you receive from your settlement. Once you have the funds, you can use them exactly as you like.

100% FREEDOM WITH VIATICAL FUNDS

Here are just a few of the ways that people decide to use their payout:

  • Take a trip with their family
  • Cover their wages so they can quit their jobs or take time off
  • Allow their family members to take time off work
  • Pay off medical bills
  • Pursue additional treatment
  • Pay for experimental cancer treatments, not covered by insurance
  • Travel to receive medical care
  • Pay for home care or hospice
  • Get extra help around the house with cleaning, childcare, etc
  • Reimburse family members for their care
  • Reduce other debts
  • Pay off their home mortgages
  • Pay for college tuition, or set aside college funds

Remember, Viatical settlement funds can be used however you want, without restriction.

How Quickly Can I Get a Viatical Settlement?

You can get a viatical settlement within days, and then you can use your viatical payout however you choose. The process is quick and easy, and we can guide you through it.

STEP 1: FREE ESTIMATE

First, get a free estimate. Then talk with one of our counselors about your questions or concerns, and decide if you want to complete our easy 3-step settlement process.

STEP 2: TWO-PAGE APPLICATION

You submit a short, two-page application along with any medical records or life insurance policy information you have on hand. Then, the viatical company or broker reviews and verifies this information.

STEP 3: REVIEW OFFER

Once confirmed, the viatical broker or company presents you with an offer for your policy. If you accept the offer, you sign and send back the final paperwork.

STEP 4: ACCEPT PAYOUT

Within days, the company becomes the new policy owner and you receive a large lump sum for your policy.

USE FUNDS AT YOUR DISCRETION

You are no longer responsible for the insurance premium payments and can use your payout however you choose. It’s that simple.

How are Viatical Settlements Different from Other Cancer Financial Resources?

The main difference between viatical settlements and other cancer financial resources is the level of financial assistance available.

LARGE UNDIRECTED CASH PAYMENT

Viatical settlements are able to provide a large sum of money since the amount comes from an already large life insurance policy.

In contrast, other resources, such as those provided by nonprofit cancer organizations, usually only help with small items such as gas cards, wigs, groceries, discounts on prescriptions, and other items.

An an example, someone with a $100,000 policy could receive a viatical settlement for as much as $70,000 from that policy (settlement amounts vary based on criteria such as age, stage, and policy amount).

COMPLETELY TAX FREE

Viatical settlements, unlike some other payouts, are completely tax-free.

By contrast the cash surrender value of your life insurance policy is taxable. If you wait until death, the proceeds of your life insurance may be subject to income tax or estate tax, depending on state laws.

IMMEDIATELY AVAILABLE

Aviatical settlement can often help with numerous larger expenses now instead of waiting for a policy’s death benefit to pay for them later.

NO ADDITIONAL DEBT

If you’re considering a loan through a financial institution, a viatical settlement may be a better option for you.

While loans can provide a large amount of funds just like a viatical settlement, they accrue interest which must be paid back on top of other expenses, and only increase monthly expenses as the person works to pay back the loan.

In many cases, an individual may not be able to pay back the loan amount back to the business entity, adding additional debt and stress.

In contrast, with a viatical settlement transaction, you no longer have to pay your monthly life insurance premium payments so, in addition to getting the lump sum, this option also reduces a person’s monthly bills.

Who Provides Viatical Settlements

Viatical settlements are usually done through either a viatical settlement company or a viatical settlement broker.

VIATICAL SETTLEMENT COMPANIES

Aviatical company is an organization that’s licensed to purchase life insurance policies directly from the insured.

VIATICAL SETTLEMENT BROKERS

A viatical settlement broker is an individual who negotiates on behalf of the insured to secure an offer.

Another key difference is that a viatical settlement broker normally charges the insured an applicable fee to help negotiate an offer, while working directly with a viatical settlement company avoids this cost.

Is it Legal to Sell My Life Insurance Policy?

Yes! Your life insurance plolicy is considered an asset that you own, like any other asset that you have. It is at your sole discretion to keep it, sell it, declare beneficiaries, etc.

THE CASE THAT SOLIDIFIED YOUR RIGHT TO SELL

The legal basis for life settlements as a legitimate, legal transaction for life insurance owners can be found in the “Grigsby v. Russell” case.

In the case of “Grigsby v. Russell,” doctor A.H. Grigsby had an ill patient named John C. Burchard who required a special and expensive operation. In hopes of avoiding a financial hole, he volunteered to sell his own life insurance policy to the doctor for $100, if he agreed to pay the remainder of the insurance policy premiums. Dr. Grigsby agreed and that’s how Burchard became the first person in history to successfully sell a life insurance policy for a cash payout.

One year later, Dr. Grigsby tried to acquire the insurance policy’s death benefit when Burchard passed away, but an executor took the case to court and won. This case eventually ended up in the Supreme Court. Ultimately, Justice Oliver Wendell Holmes, an Associate of Justice of the Supreme Court, described life insurance as property, which meant it could be transferred to a third party by the viator, according to the insurance laws.

THE RISE OF VIATICAL SETTLEMENTS

Although viatical settlements have been around for quite some time, many life policyholders are unaware of the financial benefits a viatical settlement can provide to an individual policyholder or loved one.

This type of transaction became popular in the ’80s as more people with terminal illnesses had life insurance policies they didn’t need. This led to what we now know as the viatical industry—when seniors or individuals who are terminally ill can sell their insurance policy for immediate access to their funds.

Viatical Settlements vs. Senior Settlements – How are they Different?

There are two different types of life settlements—senior settlements and viatical settlements.

SENIOR SETTLEMENTS

A senior settlement, also known as a life settlement, is a transaction through which the owner of a life insurance policy sells his or her policy to a buyer or third party life settlement broker in exchange for a cash settlement that can almost quadruple the amount of the policy owner’s cash surrender value.

Note: Senior settlements are usually owned by people who are in their Golden Age or 70 and older.

VIATICAL SETTLEMENTS

The second kind of life settlement is a viatical settlement. A viatical settlement is when a policyholder with a terminal illness sells their life policy to a third party at a discount from its cash value for an immediate payout.

The main difference between a viatical settlement and a life settlement is that a viatical settlement is reserved for those who are terminally ill—individuals who have a two-year life expectancy, and are seeking additional financial empowerment.

Why Should I Get a Viatical Settlement Estimate?

Overall, viatical settlement transactions are a great option for cancer patients because it provides the level of financial assistance needed without any costly fees or interest rates.

ROOM TO FOCUS ON WHAT MATTERS

Financial stress can get in the way of healing and when your finances are more settled, you can truly focus on recovery and spending extra time with your family.

We hope this guide helps answer the “What is a viatical settlement?” question for you. If you would like to learn more about the viatical settlement process and see if you qualify for one, read more about the process.

ESTIMATES ARE FREE, NO OBLIGATION

At American Life Fund, we are committed to helping our clients get the funds they need as quickly as possible. If you’d like to speak with one of our caring and dedicated counselors, please call us at 877-297-4592.

Wondering if you qualify for a viatical settlement? Find out instantly by using our simple online form now.

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