You can obtain a viatical settlement by selling your life insurance policy. A viatical settlement broker finds a buyer for the viator’s insurance policy. The settlement broker prepares a viatical settlement contract. Once you’ve finalized your written agreement, the buyer makes a single lump sum cash payment for your policy. The policy buyer assumes responsibility for any remaining policy payments owed on the viaticated policy and chooses a new beneficiary for your policy. When you die, the beneficiary selected by the buyer receives the death benefits.
Viatical settlements offer viators financial advantages. There are also several other benefits of entering into a viatical settlement contract. Review the reasons to consider becoming a viator to determine if a viatical settlement is right for you.
Terminal Illness
Anyone can pursue a life settlement, which involves selling your insurance policy to a buyer for a single cash payment. Still, a viatical settlement is only an option that’s available to you if you have a terminal or chronic illness. Viatical settlement applicants must provide medical documentation to demonstrate to the viatical settlement company that they qualify to enter a viatical settlement contract. A person has a terminal illness when their life expectancy is less than two years. One reason viatical settlements are limited to individuals with chronic or terminal illnesses is that viatical settlements pay more than life settlements. With a life settlement, the buyer could wait decades to receive the cash payout for their death benefits. Still, the buyer spends more on viatical settlements because they expect to receive the death benefits in a shorter period.
A Higher Cash Payment
It is possible to obtain the cash-in value of your life insurance policy from your insurance company, but both life and viatical settlements pay more than the face value of your policy. You’ll access the highest amount of funds possible if you work with a viatical settlement broker to find someone to buy your insurance policy.
Viatical Settlements are Tax-Free
Selling your life insurance policy enables you to access tax-free funds quickly. You may be considering selling your house or taking out a second mortgage if you need funds, but those options are complex and take time. You won’t have to hire a real estate agent to help you find a new place to live or get an accountant to help you determine how much money to set aside for taxes.
Personal Care
Daily living activities may be too difficult for you to manage on your own, and you may need assistance. Some people opt for in-home care, enabling them to remain independent while receiving the help they need. If you’re having seizures and convulsions, you may need to be monitored to determine the type of seizure you’re having and what’s causing the seizures. Seizures can be caused by medications, high fever, epilepsy, stroke, head trauma, brain tumors, autoimmune disorders, and visual stimulants.
Different types of seizures can affect different parts of the brain. There are several types of seizures, including focal seizures, partial seizures, absence seizures, atonic seizures, febrile seizures, myoclonic seizures, tonic seizures, and tonic-clonic seizures. While you may stay awake during an absence seizure, a grand mal seizure will cause loss of consciousness and convulsions. A magnetic resonance imaging (MRI) scan may determine the cause of the seizures. Monitoring your seizure activity to identify the type of seizure you’re having can help ensure you receive an accurate diagnosis and effective treatment for your seizures.
Medical Expenses
The United States has the highest healthcare costs in the world. Treatment for terminal illnesses, such as cancer, may cost hundreds of thousands of dollars. Suppose you’re meeting with your financial planner to determine how to settle your estate and cover the cost of your medical care. In that case, it’s a good idea to talk about the option of obtaining a viatical settlement. You can use the money from your viaticated policy to pay medical bills, purchase medication, or pay for hospice care.
End-of-Life Planning
A viatical settlement can be an excellent way to obtain the funds you need to settle your estate. You can use your viatical funds for any purpose, which means you can head to your financial institution and contact each lender you owe money to and discharge your existing debts. You may want to pay for your funeral and burial before you die to ensure your wishes are respected. You may also opt to use your funds to fulfill some of the items on your bucket list to make your final days as enjoyable as possible.
There are many reasons people opt to pursue viatical settlements. They may need funds to pay for personal or medical care. Viatical settlements also offer financial advantages because they pay more than other options and provide easy access to tax-free funds.
