LifeViatical Life Settlements – What They Are And How They Work

A viatical life settlement provides a critical financial solution for individuals facing terminal illness. By allowing policyholders to sell their life insurance for a lump sum, this option can offer immediate funds to ease financial burdens, enabling a greater focus on care and quality of life during difficult times.

What Is A Viatical Life Settlement?

A viatical life settlement involves the sale of a life insurance policy by a terminally ill individual to a third-party buyer. In return for an upfront cash payment, the buyer takes ownership of the policy, pays the premiums, and receives the death benefit upon the insured’s passing. This arrangement provides financial flexibility when it’s needed most.

How Are Viatical Life Settlements Different From Regular Life Settlements?

While both viatical and regular life settlements involve selling a life insurance policy, there are key differences:

1. Eligibility:
• Viatical Settlement: Designed for individuals with a life expectancy of 24 months or less, often because of a terminal illness.
• Life Settlement: Available to seniors with life expectancies that are usually over 25 months, generally aged 65 or older, who no longer need or want their life insurance policy.
2. Tax Treatment:
• Viatical Settlement: In certain cases, the settlement proceeds may be received tax free as the IRS views the proceeds as an accelerated partial payment of the policy’s death benefit.
• Life Settlement: Proceeds may be subject to taxes, depending on the gain from the sale and applicable tax laws.*LifeRoc does not provide tax advice, please consult a tax professional

Why Choose A Viatical Life Settlement?

Viatical settlements are often chosen by individuals who:

• Want immediate cash to cover medical expenses, in-home care, or experimental treatments.
• Wish to improve their quality of life by reducing financial stress.
• Have loved ones who no longer rely on the policy’s death benefit or prefer to provide financial support to beneficiaries now.
• No longer want or need their life insurance policy

Benefits Of A Viatical Life Settlement

• Immediate Financial Benefit: Provides access to funds which can be used as the client chooses, such as for care and living expenses. A viatical settlement may also reduce the client’s expenses by eliminating their life insurance premiums.
• Eliminates Premium Payments: The policyholder is no longer burdened with ongoing premium costs.
• Tax Advantages: For terminally ill individuals, the settlement proceeds may be received tax free as the IRS views the proceeds as an accelerated partial payment of the policy’s death benefit. *LifeRoc does not provide tax advice, please consult a tax professional.
• Control Over Funds: The lump sum can be used however the policyholder chooses, from covering medical bills to supporting family members, etc.

When to Consider a Viatical Life Settlement

If you or a loved one has been diagnosed with a terminal illness and maintaining a life insurance policy no longer aligns with your financial needs, a viatical settlement can offer a lifeline. It’s an option worth considering when immediate liquidity is more beneficial than retaining the death benefit.

At LifeRoc Direct, we specialize in helping individuals explore their options with compassion. If you think a viatical settlement might be the right choice for you or your family, Call LifeRoc for a fast policy appraisal to find out what the value of the life insurance policy is with no obligation to sell.