3 Reasons to Consider a Viatical Settlement


A cancer diagnosis or other terminal illness can completely change your life in an instant. All of a sudden you may be faced with some decisions that you never thought you would have to make. Not only is your life seemingly upside down, but your finances might also be in jeopardy as well. In this situation, you might consider a viatical settlement. Many people are unaware of this option for those who have a terminal illness. A viatical settlement offers you the opportunity to sell a life insurance policy for a cash payout. Through a viatical settlement broker, you could relinquish ownership of your life insurance policy to a viatical settlement provider.

To qualify for a viatical settlement, you must have a chronic or terminal illness and have a life expectancy of 24 months or less. The viatical settlement purchaser will then pay a lump sum of cash in exchange for the policy. The payment for a settlement is usually larger than the cash surrender amount of a policy but less than the death benefit. The viatical settlement provider will then become the new beneficiary for the life insurance policy. There are a few benefits for qualified viators to turn to a settlement. Let’s take look at some reasons to consider a viatical settlement.

1. You don’t need your life insurance policy.

A life insurance policy is a wise investment when you are young and have responsibilities. You might not need your insurance policy, however, if you no longer have dependents who will rely on life insurance death benefits if something happens to you. You also might not need your life insurance policy if there is no concern about mortgage or funeral expenses.

If you have been diagnosed with a terminal illness, you can cash in on your insurance policy through a viatical settlement. Since viatical settlement payouts are usually tax-exempt in the United States, you can use the cash for whatever you need. You might contact a financial advisor, however, as a viatical settlement could impact your income tax.

2. Pay for personal expenses.

At any point, we all find ourselves with credit card debt, car payments, and other bills. While credit card debt and other personal bills might not be your main concern when facing a terminal illness, some want to get everything in order.

Many people want to settle all of their affairs, bills, and debts so that relatives won’t have to take care of them. For others facing this kind of life event, they just want to enjoy as much time as they have left with family and friends. The lump-sum cash payout from viatical settlements could be used to fund your bucket list or special vacation.

3. Pay for medical care.

Many serious medical diagnoses are accompanied by expensive treatments and medications. Even with insurance, medical expenses for someone with a serious illness could be substantial. Additionally, many people with a chronic illness or terminal illness have trouble with the activities of daily living and require a home health aide. Viatical settlement funds could be used to cover medical expenses and personal care costs and help people stay in their homes for as long as possible. When faced with mounting healthcare costs due to a terminal medical diagnosis, a viatical settlement could be the answer.

For people facing the end of their life due to a terminal illness, it can be a difficult time. On top of health issues, there could be bills, personal expenses, and other stresses that can compound the situation. Individuals in this situation deserve some peace and a viatical settlement could be a way to find it. From paying bills to taking care of a debt, there a few reasons to consider a settlement. Of the reasons for viatical settlements, however, the main reason is to provide peace and comfort.