The Difference Between Viatical and Life Settlements
People choose to sell their life insurance policies when they find that the policy is no longer wanted, needed, or can no longer be afforded. When it comes to life settlements and viatical settlements, choosing the appropriate route is not always as easy as it may seem. Life insurance policies carry a cash value with them in which you can sell to a third-party buyer in return for monetary funds. In situations when individuals no longer want or can afford their policy, many times, they will simply let their life insurance policy lapse. All those years of paying into the policy will reap no return for the policyholder, and large sums of money will be lost.
Viatical Settlements vs Life Settlements
So what is the difference between viatical settlements and life settlements? Both of these methods involve selling a life insurance policy and while they are similar, they do vary slightly.
A viatical settlement is the sale of an existing life insurance policy at a discount form its value for cash. This type of settlement is offered when the insured is terminally ill-designed specifically for those who have a two to four-year life expectancy. If an individual knows they will have costly medical bills that need to be taken care of upon their death, they will invest in a viatical settlement to ensure that their family is not left with the financial burden of paying off those bills. The idea is that the money the terminally ill gets from the settlement is to go towards medical expenses during this two to four year period. Since viatical settlements are based on the speculation of death, it’s essential that potential policyholders fully comprehend the basics of viatical settlements in relation to their current situation. Due to the time value of money, the longer the life expectancy rate, the cheaper the policy will be, and the longer an individual lives, the lower the return is. Due to this, it’s highly important that you invest your time with a viatical settlement company that’s both reputable and has your best interest at heart.
A life settlement is a trade between the policyholder and the purchaser. This type of settlement is designed for those with longer life expectancies. Life settlements are designed for those with longer life expectancies. Life settlements are fantastic as they allow the policyholder to obtain cash for an unwanted or unaffordable life insurance policy. In turn, they get to enjoy financial relief and have the option to spend the funds however they choose to. The benefit of selling a life insurance policy in the event of retirement or old age is that the insured will obtain significantly more money than if they were to simply surrender the policy or allow it to lapse.
When A Viatical Settlement or Life Settlement Makes Sense
There are several instances in which a viatical or life settlement might make sense for you:
- Your policy is about to lapse
- You no longer require coverage
- You do not have any beneficiaries
- You are looking to liquidate your assets
Always consider your options and don’t simply let your life insurance policy expire or agree to the surrender value that insurance companies offer you. As a reputable life settlements and viatical settlements company, Life Settlements Inc can assist you in obtaining the most cash out of your life insurance policy. Maximizing the value of your life insurance policy will allow you to turn your unwanted policy into money that you can put toward vital expenses.
Contact us at 1-866-326-5433 for more information on life settlements and viatical settlements.