What Are Viatical Settlements?
Viatical settlements are simple financial transactions offering chronically or terminally ill life insurance policy holders the option to receive substantial immediate cash advances from existing life insurance coverage. This is done by selling the life insurance policies to state licensed viatical settlement providers on the secondary market.
Selling a life insurance policy is similar to selling a home or a car – all rights, title, and beneficial interest in the policy are transferred to the buyer as well as responsibility for future premium payments.
The price paid for each policy is calculated by investors based on multiple considerations including your policy face amount, current policy value, future premium expenses, health prognosis of the insured, prevailing interest rates, as well as other risk factors.
The battle against terminal illness can cripple or deplete the life savings of entire families. Most frightening, many individuals facing life-threatening illnesses eventually lack the financial resources even to pay for basic health care or secure housing.
Viatical settlements are designed specifically to provide critical patients and their families new options to receive cash for their life insurance policy often when it is needed most, with security of full industry regulation to protect their interests.
Viatical settlement contracts enable policy owners to convert a valuable asset into cash pre-death to pay medical and custodial care bills, pursue alternative medical treatments that their health insurance won’t cover, reduce other family financial hardships, or pursue opportunities to enrich their lives in ways that might otherwise be unaffordable.
If you are critically ill, through viatical settlements, you can sell your life insurance policies for cash to alleviate financial pressures during life’s most precious moments.
Who Qualifies For Viatical Settlements?
While each case is unique and evaluated individually, to be eligible for viatical settlement consideration, policy holders must meet the following criteria:
- Hold a valid life insurance policy of minimum face value of $50,000 that has been in place a minimum of two years
- Be diagnosed with a chronic or terminal medical condition with current life expectancy not to exceed 24 months
- No minimum age requirements apply
To find out if you qualify, contact Vista Life Settlements today to for a complimentary assessment to explore if and how a viatical settlement might help you get the cash you need.
Why Viatical Settlements?
Secure Substantial Cash When It May Be Needed Most
When you made the decision to purchase life insurance, it was for all the right reasons – to provide some financial security for your family after you’re gone, to build or transfer tax-advantaged wealth, or to cover end-of-life expenses and minimize estate taxes. But an advance stage cancer or other terminal illness diagnosis can drastically change one’s original plans and immediate needs.
While most Whole, Universal, and Variable Life policies offer options for policy holders to surrender the policy at will, often the cash surrender value is minimal. However, when your qualified life insurance policies are marketed and sold effectively on the secondary market through viatical settlement contracts, they can reap significantly higher returns.
According to the US Government and Account Office (July, 2010), the average lump sum viatical settlement offer is typically 4 to 7 times more than a policy’s normal cash surrender value offered directly by the insurer. This can make your policy a valuable asset and a viatical settlement option provides you with another choice to turn death benefits into living solutions.
If you have a Term Life Insurance policy, it likely doesn’t offer a cash surrender option since these policies usually don’t build cash value over time. However, many term policies do provide the option to “convert” the Term policy to a Whole, Universal, or Variable Life policy, then making it immediately eligible for a viatical settlement payout.
Viatical settlements provide the terminally ill not only valuable cash resources to address immediate financial needs; they also provide freedom to use the funds for any purpose without restriction to ease some of the emotional stresses of their condition. This might include paying off debts, making gifts to families, friends, or charities, or prepaying end of life expenses to provide the peace of mind that survivors and loved ones will not be saddled with such obligations upon their passing.