A viatical settlement and a life settlement are two slightly different things. It is important to know the difference, especially if you are considering selling your policy for cash.
In many cases, a life settlement takes place when you no longer wish to have coverage and would rather use the cash toward the life you are currently—and healthily—living.
In either case, the point of a viatical settlement and a life settlement is to sell your life insurance policy. Both grant you the opportunity to transform your policy into an untapped source of cash, exchanging your financial obligations for a free-flowing quality of life.
It’s as easy as contacting a settlement broker and you’ve instantaneously opened up a source of capital that was not previously at your disposal.
Before we address how a viatical settlement differs from a life settlement, let’s discuss why you might want or need to sell your life insurance policy in the first place.
You can sell your life insurance policy at any age. Commonly, sellers are retired or over the age of 65, but if you have a high premium and a low life expectancy, your policy is worth a significant amount of money.
Selling your life insurance policy could mean gaining financial stability. You can cash in on its value (which is calculated by your broker and buyers) and then use that capital for anything you might need: medical bills, financial obligations, or mounting healthcare costs.
As mentioned above, both viatical settlements and life settlements involve the sale of your life insurance policy for cash. Both processes will also result in you receiving less than the death benefit of the policy, but more than the surrender value.
There is just one key difference between these two settlement types:
A life settlement is undertaken by an individual in relatively good health, while a viatical settlement is undertaken by someone with a terminal illness.
Now that we’ve established the difference between a life settlement and a viatical settlement, it is important that we outline how viatical transactions work. In a nutshell, it involves three parties:
- You (the policy owner and seller)
- A life settlement broker (Life-Settlement.com)
- A viatical settlement provider (the buyer)
Suppose you have been diagnosed with a terminal illness, and given two years to live. You have everything lined up for your children and grandchildren so they will be financially protected. However, you need cash to last for the rest of your days.
You would work with a trusted life settlement broker to receive multiple offers from settlement providers. Then you would choose the offer that you like the most (whether due to the amount offered, or other elements unique to that provider’s offer), and sell your life insurance policy to them.
The provider will pay a lump sum for your policy. This money is now yours to do with as you wish. The provider then begins making payments on the life insurance policy they purchased from you, and when you pass on, they will receive the death benefit of it.
As long as you are working with a professional life settlement broker, you will not need to worry or be concerned with all of the details and differences between a life settlement and viatical settlement. They will handle all of this for you and ensure that you receive the maximum value for your policy while complying with all applicable state rules and regulations.
As you can see, a viatical settlement offers hope and help for those with chronic and terminal illnesses. However, it is vital that you work with the right life settlement provider. Seek to work with a trustworthy company, dedicated to transparency and securing the best deal for you and your loved ones.
Contact us at Life-Settlement.com to learn why we should be your first choice. We will always put your needs first and we’ll guide you on the right path to selling your life insurance and maximizing the value of your policy.