Life insurance policyholders may opt to sell their life insurance policy. Depending on the conditions of the sale, this process is called either a life settlement or a viatical settlement. Individuals who have a chronic or terminal illness qualify for viatical settlements. Viators are dealing with severe medical issues and may need access to the funds from their life insurance policy to cover the costs of medical care or other personal expenses.
No matter why you opt to pursue a settlement, there are some steps you can take to ensure the process is successful. Using these tips will ensure you make the best decisions and understand how to maximize your settlement funds.
Work with a reputable company.
Anyone who wants to obtain a viatical settlement can opt to sell their life insurance policy to a third-party buyer. Viators can use a settlement broker or company. It’s crucial you work with licensed professionals who understand the insurance industry and have the training required to handle viatical settlements.
A viatical settlement company, such as American Life Fund, confirms you qualify for a viatical settlement. They may review medical documents to verify your condition. Reputable viatical settlement companies maintain complete confidentiality and strive to provide you with funds as quickly as possible.
Once you’re confirmed, they locate a third-party buyer for your policy. After the terms are settled, the company prepares the paperwork. They ensure the life insurance policy is transferred to the buyer. The buyer names a new beneficiary who will receive the death benefit from the policy when you pass away. You receive a single lump-sum cash payment in exchange for your policy death benefit.
Prepare for a smooth approval process by securing appropriate medical paperwork.
To qualify as a viator, you must have a life expectancy of 24 months or less. To establish this, compile medical documentation from your primary care provider and any specialists you’ve seen. Having a comprehensive file outlining your diagnosis and prognosis will simplify the approval process.
It can feel invasive answering a stranger’s questions about your medical situation, and compiling the documents for review can reduce your stress during the approval process.
Familiarize yourself with the advantages of a viatical settlement.
Although life insurance policies have a cash value, viatical settlements pay more than the cash value. They also pay more than people receive for life settlements, making viatical settlements the most profitable option for individuals who want to sell their life insurance policy.
Viatical settlements offer quick access to tax-free funds. You don’t have to set money aside to pay taxes on your settlement. You have full access to the entire amount you receive.
The funds are unrestricted. You may choose to use the money to pay medical bills or cover the cost of treatment. You may also opt to use the money to pay for professionals to provide in-home care. You could choose to spend the money completing items on your bucket list, set up trust funds for family members, or create a memorial scholarship in your name. Whether you opt to spend the funds on your daily life needs or personal indulgences, the choice is yours.
Familiarize yourself with other financial options.
You can consider other financial options to access the finances you need for your medical expenses and personal needs. The U.S. Department of Health and Human Services offers benefits, such as food stamps and financial aid, to cancer patients. Anyone with a cancer diagnosis may also qualify for financial assistance from CancerCare and the American Cancer Society. Some settlement companies also offer financial services for cancer patients.
Understand how your settlement will affect your family.
People often buy life insurance policies to cover the costs of your funeral and other critical expenses to ensure your family will have the financial resources they need after you pass away. Determine how to adjust your plans if you opt to pursue a settlement. You can use the funds to prepay for your funeral or pay off your mortgage, ensuring your family can afford to remain in your home. If you have more than one life insurance policy, you aren’t required to sell both policies, which means you can keep one policy.
Obtaining a successful viatical settlement begins with working with a reputable company with licensed brokers who will work to get you the maximum amount of money as quickly as possible. You’ll ensure the process is smooth and successful by gathering the medical paperwork required to be approved as a viator.