Viatical SettlementSelling your existing life insurance policy once you have become chronically or terminally ill
You may have existing provisions within your life insurance policy which allow you to get a portion of your death benefit advanced to you by your life insurance company. This option should always be explored first. However, many policies will not allow you to get an advance release of your death benefit and others often require that you be within 6 months of the end of your life. If you have a terminal illness and are not eligible for your policy’s advanced death benefit, Reverse Life Insurance may be a great solution particularly when you need cash to pay for the high cost of care.
The stress of worrying about finances is the last thing you need if you are battling a terminal illness. You will most likely find that if you are expected to live beyond six months and have no cash surrender value; your financial options are often limited with respect to your life insurance, apart from a viatical settlement.
A viatical is the sale of your life insurance asset. The value of any asset is typically determined by an appraisal. The same is true with viaticals. With real estate for example: location, structures, land, and various other variables are assessed against recently transacted property closings. With a viatical, the largest contributing variable is your life expectancy (LE). A life expectancy provider assesses your life expectancy based upon your medical information and your physician’s prognosis of your health. Once the life expectancy provider has provided an LE, viatical buyers can then do their internal calculations on your policy to arrive at a value of the policy in the secondary market for insurance. Other variables contributing Viatical Settlement to the value are the type of life insurance policy you own, the solvency of your life insurance company, any particular policy provisions within your life insurance policy, your face amount, and lastly the premiums you pay.
If your policy does not provide for an advanced death benefit, a Viatical Settlement may be the best option for you to get cash now from your life insurance policy.