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Viatical Settlement CompaniesDo?
Viatical Settlement Companies defined
Viatical settlement companies are defined by some states as: A viatical or life settlement provider is defined as a person, other than a viator, life settlor, or owner of an individual policy or certificate holder under a group policy insuring the life of a viator or life settlor, who enters into a viatical or life settlement with a viator or life settlor and owner or certificate holder, or who attempts to do so through negotiation, solicitation, or acquisition of confidential information from or about a viator, life settlor, or owner. What that means is Viatical companies are for profit organizations that purchase life insurance policies that insure terminally ill people. Viatical settlement companies benefit the policy seller, who is typically the same person as the insured, by providing immediate cash before the insured dies. Viatical settlement companies in turn profit by receiving the full death benefit of the life insurance policy when the insured eventually dies. Why would a viatical settlement company buy an existing life insurance policy? The viatical company agrees to pay the insured a lump sum and pay the ongoing life insurance premiums to keep the policy in force. The viatical company will make a profit if the amount they spend to buy the policy plus the ongoing premium expense is less than the death benefit of the life insurance policy. Essentially viatical companies are investing money into a life insurance policy at a discount. Then the viatical settlement companies realize a profit when the policy matures or pays the death benefit. To the viatical company it is a smart business investment. To the insured that gets paid by the viatical settlement company it is a much needed financial life line. Viatical settlement companies help insured when they desperately need it most.
Viatical Settlement Companies Can Help.
Viatical companies play an important and crucial role for people who are terminally ill. Viatical settlement companies provide access to money for terminally ill patients. Terminally ill patients are most likely experiencing more expenses than at any other time in their lives. While at the same time, without a viatical settlement company they are in the worst position to generate income. This is why viatical settlement companies are so important.
What Role Does a Viatical Settlement Company Play?
This is because treating a terminal illness can be very, very expensive. In many cases, patients try experimental medicine that is not covered by insurance. In addition, the cost of treating terminal illness can exceed limits of health insurance policies. Also, some terminal illnesses necessitate around the clock care givers to assist patients, which is not always covered by insurance. Furthermore, viatical companies offer money for much needed living expenses. When someone is terminally ill they often can not continue to work and they no longer generate income. A viatical company is there to help find money for these stressful and important expenses. Unfortunately, many people don’t know that viatical settlement companies are available t help. If they do, they often don’t know where to find and engage with viatical companies.
Why Should I Use a Viatical Settlement Company?
One alternative to selling a life insurance policy to a viatical company is to use the accelerated death benefits of a life insurance policy. Accelerated death benefits allow a portion of a policy’s death benefit to be accessed prior to an insured’s death. However, accelerated death benefits do have some trade offs compared to working with viatical companies. First, not all policies have an accelerated death benefit provision. However, viatical settlement companies will review all life insurance policies of a terminally ill insured. Secondly, the accelerated death benefits have some important stipulations. They are normally restricted to certain types of illness or diseases. While viatical companies will consider buying policies for terminally ill patients regardless of their particular illness or disease. Thirdly, accelerated death benefits dictate how much money can be accessed by an insured while still living. While a policy seller can negotiate with a viatical company or several viatical companies to find the best offer. If they don’t’ like the amount being offered to purchase their policy they can refuse to sell it to a viatical settlement company. In contrast, a positive aspect of accelerated death benefits is that beneficiaries will still receive a portion of the death benefit after the insured dies. This is untrue of working with viatical settlement companies after money has been received. Although, it is important to remember that accelerated death benefits are deducted from the death benefits so the amount received by beneficiaries will be greatly reduced. This is different from working with a viatical company. When a policy is sold to a viatical settlement company the original beneficiaries receive nothing. As part of the sale, the viatical company replaces the beneficiary on the policy. Viatical companies make their money by collecting the death benefit when the insured dies.
What are the Alternatives to a Viatical Company?
It is wise to know all of your options before making any decisions about accessing the accelerated death benefits or selling a policy to a viatical company. Be sure to evaluate the availability of accelerated death benefits and their financial implications compared to working with viatical companies. If the decision is made to sell a life insurance policy, it is best to discuss a viatical with several viatical companies. Have each viatical company make an offer and compare all of the offers. Then select the viatical company that makes the most financial sense and you are most comfortable working with. Facing difficult decisions while experiencing a terminal illness is hard enough. Working with viatical settlement companies and ultimately choosing a viatical settlement company to buy your life insurance policy shouldn’t be.
Selecting Viatical Settlement Company
A viatical settlement company is there to help, but viatical settlement companies are not all the same. Although the viatical settlement company industry is not very large, there are many viatical companies available to purchase policies. The first step is to find a viatical settlement licensed in your state. Each state maintains a list of the viatical companies licensed to do business in their respective state. From there you can contact each viatical settlement company or work with a broker who has relationships with many viatical companies. Feeling comfortable with the arrangement and the viatical settlement company is paramount to having a successful viatical transaction.