A Close Look at the Viatical Settlement Process

A Close Look at the Viatical Settlement Process

Apr 29, 2021, 8:31:37 AM Business

A viatical settlement is obtained by a policyholder when they sell their life insurance policy. Viatical settlement companies, such as American Life Fund, verify sellers qualify for a viatical settlement, Office Health and Safety Essentials, locate a buyer, and finalize the sale.

Many people may wonder why people don't turn their life insurance policy in for its cash value if they no longer need it, or how viatical settlements differ from life settlements. Read on to learn how viaticals work, how they differ from life settlements, and the benefits viatical settlements offer to sellers.

Viators must qualify for a viatical settlement.


People who obtain viatical settlements are known as viators. Viators must qualify for a viatical settlement. These settlements are limited to individuals who a chronic or terminal illnesses. The life expectancy of a viator usually is two years or less. Buyers pursue viatical settlements based on the likelihood that they'll be able to receive the death benefits within a short period.

Viatical settlement companies confirm a potential viator's diagnosis. An individual who's just received a cancer diagnosis may present their medical files to the viatical settlement company to initiate the process of obtaining a viatical settlement. Individuals who aren't terminally or chronically ill will not qualify to become a viator.

Viatical settlement brokers simplify the process for viators.


Visit americanlifefund.com to learn about viatical settlement companies and how these brokers simplify the viatical settlement process. Viatical settlement brokers must have a brokers license, ensuring their familiarity with viatical settlement regulations and life settlement regulations. These experts understand all the steps that must be fulfilled to complete the viatical settlement. Once they confirm an individual is eligible to be a viator, they use their contacts to locate a buyer. The broker negotiates the sale, prepares the legal paperwork, transfers the life insurance policy to its new owner, and transfers the payment to the viator, ensuring the viator obtains the financial relief they need.

Life settlements are similar to viatical settlements.

Like viatical settlements, life settlements involve a policyholder selling their life insurance policy. The critical distinction between viatical and life settlements is how to qualify. While viators must establish they have a limited life expectancy, anyone can obtain a life settlement. Life settlements are options for policyholders who need financial assistance or no longer need their life insurance policy.

The other critical difference between viatical and life settlements is that sellers receive less money for a life settlement. The sale price of the policy is only partially based on the policy's value. The person acquiring the policy also bases their payment on the policyholder's life expectancy. Since sellers don't have to be terminally ill and may be in good health, they receive less money for their policy.

Viaticals offer specific advantages to policyholders.


One of the primary advantages of viaticals is that they pay more than the insurance policy's face value, and they pay more than life settlements. The money viators receive is tax-free, ensuring viators can access the total funds they receive and spend them as they see fit. A viatical can ensure financial freedom or alleviate the viator's financial anxiety during a stressful time in their life.

The person acquiring the policy assumes responsibility for any outstanding premiums owed. This further alleviates the financial help the viator receives by reducing their monthly expenses.

There are some potential drawbacks from viaticals.


When someone pays for a viatical, they become the policy's beneficiary. This means viators who opt to pursue a viatical settlement won't pass on the death benefits to their beneficiary when they die. This may affect the viator's spouse or dependent's ability to pay for a funeral and cover any debts they had when they died.

The money paid for a viatical settlement isn't restricted.


Viators may use the funds they receive however they choose. One viator may opt to use their money to pay for their medical expenses and cover medications and treatment costs. Another viator may choose to spend their money completing their bucket list, paying for skydiving lessons, hot air balloon flights, or a road trip across the United States.

Viatical settlements involve a viator selling their life insurance policy after being diagnosed with a chronic or terminal illness. Viatical settlement companies find a third party to buy the policy and negotiate the sale, making it easy for viators to secure funds from their life insurance policy.

Published by Simon Hopes

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