Viatical Settlements: What You Need to Know

    If you are struggling with a terminal illness, it is not news to you that medical expenses can be extremely difficult to keep up with. Even if you have health insurance, policies do not always cover everything. You may have found yourself needing money, and fast.

    Going through a viatical settlement may be a good option for you if you find yourself in need of cash to pay for medical expenses or housing costs while you are potentially out of work. Viatical settlements allow you to get paid a lump sum for your life insurance policy. If you are thinking about getting a viatical settlement, read on for everything you need to know before you decide.

    How does a viatical settlement work?

    Viatical settlements are arrangements that take place when someone, often viatical settlement companies, offer to purchase a life insurance policy at a discount of the policy’s face value. The policyholder would receive that payout so that they can cover medical expenses and do what they need to with the money. The buyer or settlement company would receive the full death benefit at the time of the policy holder’s death. This means that instead of the initial beneficiaries of the life insurance policy receiving the lump sum death benefit when the policy holder dies, the buyer will instead collect that money. While buyers can be individuals who wish to invest in a viatical settlement for personal reasons, there are also reputable companies such as American Life Fund that can offer you money for a life insurance policy.

    What to consider before you sell your life insurance policy

    Before you sell your life insurance policy, there are some key things you should consider. For starters, you should only sell your life insurance policy if you are struggling with a life-threatening or terminal illness. You should also consider the amount of costs that may or may not be stacking up around you. If you are struggling to pay premiums on the life insurance policy and you also need money for your living expenses, medicines, and doctor’s appointments, selling the policy could be your best move. An additional factor to consider is whether your beneficiaries truly need the money from your payout. If your beneficiaries are fully capable of making their own income or do not struggle with many costs in their life, they may not depend on your death benefit they way others’ beneficiaries might. 

    How much can you expect to make from a viatical settlement?

    The amount you can expect to make from selling your life insurance policy varies. It is dependent on the value of your policy. It also depends on your health. If you are closer to the end of your life either because of age or because of the severity of your illness, your life insurance policy may look more attractive to a potential buyer. The amount of your payout from selling the policy will be more than the amount you would receive if you were to surrender the policy outright, but it would be less than the full value of the life insurance policy.