Your First 5 Questions About Viatical Settlements—Answered

The process of selling a life insurance policy is often unfamiliar, and our team is dedicated to providing the clarity and support you need. We believe in empowering you with knowledge so you can make the best decision for your unique circumstances. Let’s address some of the most common questions we hear.

What is a Viatical Settlement?

A viatical settlement is the sale of a life insurance policy by a terminally or chronically ill policyholder for a lump-sum cash payment. This amount is typically more than the policy’s cash surrender value but less than the full death benefit. The proceeds can be used for any purpose, such as covering medical expenses or improving quality of life.

Who is Eligible for a Viatical Settlement?

Eligibility for a viatical settlement is based on health status. Typically, you must have a life expectancy of 24 months or less due to a terminal illness, or a chronic illness that requires substantial assistance with daily living. Our team at Life Insurance Settlements, Inc. works with you to determine if you meet these health criteria.

How is the Payment Amount Determined?

The amount offered in a viatical settlement depends on several factors, including the policyholder’s life expectancy, the policy’s death benefit, and the premium payment schedule. The younger the policyholder is and the more severe the illness, the higher the offer tends to be. We perform a thorough review to ensure a competitive and fair offer.

Are Viatical Settlements Taxable?

Generally, viatical settlements are tax-exempt for individuals who are certified as terminally ill. However, this is not always the case for those with a chronic illness. We recommend consulting with a tax professional to understand your specific situation. We are here to answer your questions and provide resources to help you.

What Happens to My Premiums and Ownership?

After the viatical settlement is finalized, the ownership of your life insurance policy is transferred to the buyer. This means you are no longer responsible for paying the premiums. The new owner of the policy takes over all future premium payments. This change can provide significant financial relief, removing a common burden for families facing serious illness and its associated costs.

Understanding the basics of a viatical settlement is the first step toward making a confident decision for your future. At Life Insurance Settlements, Inc., our team is here to guide you with care and expertise through every step of the process. We are committed to helping you unlock the value of your life insurance policy. To learn more about how we can assist you, contact us today for a free, confidential consultation.