Selling your insurance policy when you have cancer lets you access value that is otherwise locked in the policy. The proceeds can support treatment, travel for care, help at home, or other needs. This option is often considered when premiums become unaffordable, when care costs are rising, or when a policy is no longer needed for family protection. Instead of letting the policy lapse or accepting a small surrender value, you may be able to receive a much higher cash payout by selling the policy to a licensed buyer. Offers are based on your health and policy specifics such as type and premium costs.
Who May Qualify for a Viatical Settlement
Each case is reviewed individually. Buyers consider the type and stage of cancer, response to treatment, recent imaging or lab results, and overall daily functioning. Age also plays a role. Older policyholders are often eligible even when the diagnosis does not meet viatical definitions.
Some sales may be treated as viatical settlements while others are considered to be standard life settlements. The transaction type depends on whether life expectancy exceeds two years. The process is the same for each. However, taxation is different as most viatical settlement proceeds are not subject to tax while life settlement proceeds can be. Always consult with your trusted tax advisor.
Policies That May Qualify
Several types of policies can qualify:
- Universal life
- Whole life
- Guaranteed universal life
- Indexed universal life
- Convertible term life
- Annual renewable term (ART)
- Group life insurance (if continued after leaving a job)
Term policies can qualify if they are either convertible or able to continue as annual renewable term. Group life insurance may also be eligible if it is portable. If the policy has an outstanding loan, this can affect the policy’s value.
How the Viatical Settlement Process Works
- Initial review: Give us a call to learn if you are likely to qualify. By answering simple questions such as policy type and value, issue date, premium costs, and general health condition, you can learn if you are eligible for a viatical settlement.
- Authorization forms: A signed HIPAA release allows buyers to request medical records for underwriting and insurance information release will allow for gathering of necessary policy documents.
- Valuation: Buyers review the policy details and health history to model projected premiums and estimate how long the policy may need to be maintained.
- Direct offer: You receive a clear offer showing the amount you would be paid. There is never a need to deduct broker fees from your direct offer through our platform.
- Contracts and Closing: If you accept the offer, contracts are completed and ownership and beneficiary changes are filed with the insurance carrier.
- Funding: Payment is typically wired as soon as the insurance carrier confirms the change of ownership.
What Affects Your Offer
- Policy size and premiums: Larger policies with reasonable premium costs tend to receive stronger offers.
- Health profile:. Buyers evaluate cancer type, stage, treatment history, and functional status.
- Policy details: Convertibility, premium flexibility, and optional riders can impact value.
- Expected duration: Shorter projected holding periods usually result in higher bids.
- Market conditions: Investor demand and capital availability may affect how aggressively buyers price offers.
Tax and Benefit Considerations
Some settlements may be exempt from federal income tax when the insured meets IRS definitions related to terminal or chronic illness. Transactions that do not qualify under those rules may be partially taxable, depending on the policy’s cost basis and the total gain.
If you receive needs-based public benefits such as Medicaid or SSI, a lump sum payout could affect eligibility. A benefits advisor can help determine whether structuring the payout or timing it differently could help you stay within program limits.
Key Benefits
- Selling your life insurance policy can unlock immediate funds during cancer treatment or recovery
- Offers are usually far higher than surrender value and far better than allowing the policy to lapse
- There is no cost to request an appraisal, and you are not required to accept an offer
- Proceeds may be tax-free if the sale meets IRS requirements related to illness
Selling your insurance policy when you have cancer gives you the ability to turn a long-term financial asset into immediate financial support for medical care and everyday expenses. To learn if you or your loved one qualify for a viatical settlement or life settlements, please give us a call at 800-973-8258.
DO YOU QUALIFY?