Viatical Settlement

A Viatical Settlement

Viatical Settlements Can Get You Needed Cash Now

Viatical settlements involve the sale of your life insurance policy once you have become chronically or terminally ill. Depending on your type of life insurance coverage and insurance carrier, you may have certain policy provisions within your life insurance policy that allow for an advance of your death benefit. This life insurance settlement option should be explored, especially if you need cash to pay for the high cost of care. You will most likely find that if you are expected to live beyond six months and have no cash surrender value; your financial options are can often be very limited with respect to your life insurance, apart from a viatical settlement.

Viatical companies fulfill certain and distinct roles in the viatical settlement process. A viatical settlement provider typically fills orders for viatical investments or often purchases viatical settlements for their own account. Whereas a viatical settlement broker has a fiduciary responsibility to you, the viator. Viatical brokers should shop your insurance policy to the highest bidding viatical providers that are licensed in your state.

What is a Viatical Settlement?

It may be easier to associate the sale of your life insurance policy with real estate. There are typically a buyer’s agent and a seller’s agent in a real estate transaction with respective fiduciary responsibilities. You can go directly through the selling agent if you are purchasing a home and may get a better deal from the agent with respect to their fee, but you may also put yourself in jeopardy of making a mistake in assessing value that no one on your side of the transaction is aware of.

Real estate value is typically determined by an appraisal. The same is somewhat true with viaticals. With real estate, your location, structures, land and various other variables are assessed against recently transacted property closings. Though your insurance company, policy size and type are all factors in the value of your viatical settlement; the largest variable is your LE or life expectancy.

One of the most important viatical companies in the industry works behind the scenes. The life expectancy provider assesses your life expectancy based upon your medical information and your physician’s prognosis of your health. Once the life expectancy provider has provided an LE, the viatical providers can then do their internal calculations on your policy to arrive at a value in the viatical market.

Viatical Settlement and Taxation

Life expectancies have been a hot topic in the life settlement and viatical industry. There are typically few complaints from the viator or seller side. Once you sell your insurance policy for cash, your responsibility is complete apart from providing quarterly updates of health status and address changes.

Though viatical settlements, life settlements are essentially the same thing, their taxation varies. The definition of a Viatical is selling your policy when you have less than 24 months to live. This stipulated period is crucial in assessing viatical settlement taxation.

If your life expectancy is beyond the definition of terminally ill as defined by your state, the proceeds of your life settlement may be considered partially taxable, based upon what you have paid in, cash value and the ultimate sales price. Viatical settlement taxes are not typical if you are deemed terminal by your State’s definition. A tax expert should be consulted in all cases once you have a projected value of your insurance policy. The fact that some life settlement proceeds may be deemed as ordinary income and may affect certain senior government programs that are based upon income thresholds is often overlooked.

Do You Qualify?

Does your life insurance have hidden value?

Find out by completing this form. One of our trained agents will reach out to you and discuss if you can sell your life insurance policy for cash.

    What are Viatical Life Settlements?

    Do Your Homework

    You should explore all of your options and always secure your own, independent viatical settlement appraisal before initiating the sale of your life insurance policy. The viatical settlement process can seem onerous, but much stress can be alleviated if you know on the front end what your life insurance policy could be worth in the secondary insurance market as a viatical life insurance settlement.

    Call for an appraisal before you attempt to sell your life insurance policy for cash.

    Viatical Settlements: Unlocking the Hidden Value in Your Life Insurance Policy

    Understanding Viatical Settlements

    If you’re seeking a way to convert your life insurance policy into immediate cash or considering the sale of your term life insurance, it’s worth exploring the concept of viatical settlements. Viatical settlements offer policyholders the opportunity to sell their life insurance policies to investors in exchange for a lump sum payment, providing crucial financial relief precisely when it is needed.

    Viatical settlements prove particularly beneficial for individuals burdened by medical expenses, long-term care costs, or other financial challenges. By selling your life insurance policy, you can access a significant amount of funds that can be allocated towards medical treatments, debt repayment, or any other pressing financial obligations.

    The Process of Selling Your Life Insurance Policy

    The process of selling your life insurance policy through a viatical settlement is straightforward. First, you must identify reputable buyers specializing in viatical settlements. These buyers, often known as viatical settlement companies, evaluate the value of your policy based on factors such as your age, health condition, and policy terms.

    Once you’ve connected with a reputable buyer, they will assess your policy and extend an offer if it holds value. Should you accept the offer, the buyer assumes responsibility for future premiums and becomes the new policy owner and beneficiary. In return, you receive a lump sum payment that can alleviate your financial burdens swiftly.

    Advantages of Viatical Settlements

    Viatical settlements offer a range of benefits, the foremost being immediate access to cash. Unlike surrendering your policy to the insurance company or allowing it to lapse, a viatical settlement ensures you receive a substantial sum without any unnecessary delays.

    Furthermore, viatical settlements grant you flexibility and control over your financial situation. You have the freedom to utilize the funds in a manner that best aligns with your needs, whether it involves covering medical expenses, clearing debts, or making strategic investments to safeguard your future.

    Unlock the Hidden Value of Your Life Insurance Policy

    Unlocking the hidden value of your life insurance policy through a viatical settlement can provide you with immediate financial relief and newfound flexibility. By partnering with reputable viatical settlement companies and seeking expert guidance, you can confidently explore this option and unlock the untapped potential of your life insurance policy.

    To learn more about viatical settlements and explore your options, reach out to us today. Our team of experts stands ready to assist you in having your policy appraised for its hidden value by a licensed buyer in your state. Discovering if you qualify typically only requires a brief 5-minute phone call.

    Who Benefits from a Viatical Settlement?

    Viatical settlements offer benefits to both policyholders and investors. Individuals with a life-threatening illness can access immediate cash by selling their life insurance policy to a viatical settlement purchaser. This arrangement can help cover medical expenses, improve quality of life, or address other financial obligations. Investment funds, on the other hand, can potentially earn attractive returns by purchasing life insurance policies at a market driven discount and receiving the policy’s death benefit when the policyholder passes away.

    Who Qualifies for a Viatical Settlement?

    To qualify, you must meet certain criteria:

    Health Condition: Viatical settlements are commonly available to individuals with a terminal or chronic illness. 

    Policy Type: Different types of life insurance policies can be eligible, including term life insurance, universal life insurance, and whole life insurance. 

    Policy Value: The face value or death benefit of the policy plays a role in determining eligibility for a viatical settlement. Policies with higher face values often offer greater potential for substantial settlements.

    Age: While age is not a sole determining factor, it can influence the evaluation process. Generally, older policyholders may have a higher likelihood of qualifying for a viatical settlement.

    Do You Pay Taxes on a Viatical Settlement?

    In most cases, the proceeds from a viatical settlement are typically tax-free. The Internal Revenue Service (IRS) considers the funds received as an advance on the death benefit rather than taxable income. However, it’s crucial to consult with a tax professional to understand the specific tax regulations that apply to your situation.