Viatical Settlement Information
If you have life insurance, are diagnosed as terminally ill and need additional income sources, one option may be to sell the policy to a viatical settlement provider. This type of transaction is called a Viatical Settlement.
When you sell your life insurance policy to a viatical settlement company, you receive a lump-sum cash payment that is a percentage of the face value of your policy (usually 40 percent to 85 percent).
The viatical settlement company then sells the policy to a third party who buys it as an investment. The investor makes money on the difference between the policy’s face value and the amount you receive. The investor continues to pay the premiums on your policy until you die, at which time the policy benefits are paid to the investor.
In general, the amount you will receive if you are terminally ill is not subject to federal income tax. If you are diagnosed as chronically ill, the viatical settlement also would not be subject to federal income tax if the funds are used to pay for long-term care services.
Most viatical companies require the following: You’ve owned your policy at least two years; your current beneficiary signs a release; you’re terminally ill (life expectancy of less than five years); you sign a release allowing the provider access to your medical records.
There are many other important considerations to keep in mind, so be certain you’re consulting with a reliable third party who has no financial stake in your decision.
Call 1-888-973-8377 to speak with a Viatical Specialist or get a FREE Online Viatical Evaluation.
