Viatical Settlement: Life Insurance Policy for Sale

Selling Your Life Coverage for a Hard-Earned Buck

By Rafael Onak, InsuranceAgents.com Staff Writer

Ever wished you could take advantage of your life insurance benefits today? In the midst of a failing economy, having cash at your fingertips is not only valuable but required if you are facing a life-threatening illness or nearing retirement. A viatical settlement can put money into your hands now. But how, you ask?

A viatical settlement allows you to purchase another person's life insurance policy. You can obtain the full policy or portion of it at a price that is less than the death benefit. When the seller dies, you benefit from the death benefit. Now this is where it gets a bit complicated. Your return depends on the seller's life expectancy, meaning that if he/she dies sooner, you will receive a higher return. On the other hand, if the seller lives longer than expected, your return will not be as attractive. It's a bit morbid, but you will gain more from a viatical settlement if the seller passes away immediately.  A viatical settlement is more an investment, but can also be looked at as a helping hand dependent upon what role you play.  Not sure if this is the option, talk to a life insurance agent to get the best understanding of the finer details.  Use our 1 step agent locator.

Eligibility for a Viatical Settlement

So who should consider a viatical settlement?

• Anybody who is insured, critically ill and in need of cash.

A payment from a viatical settlement is typically available only within the last two years of an individual's life expectancy. In most cases, you will receive your viatical payment in the form of a lump sum. If you decide to sell your policy to a third party company, be sure it's a reputable one. Reputable buyers contain credited investors and qualified buyers.

Although each company has its own rules for determining which life insurance policy it buys, most companies require that:

• You've owned your policy for at least two years.
• Your beneficiary has signed a release or waiver.
• You are terminally ill.

Is a Viatical Settlement Right for You?

Keep in mind that a viatical settlement affects not only you, but also the people who care for and about you. Before you make a decision, consult with your family as well as your life insurance agent on the life-altering decision. If you are in desperate need of cash, however, a viatical settlement is a quick and easy solution to a stressful problem.

Published: Tuesday 10th November 2009