A viatical settlement is a financial transaction that can help a person with a life-threatening illness, such as cancer, get cancer care financial assistance by selling their life insurance policy to a third-party investor for a lump sum payment. The payment is typically a percentage of the policy’s death benefit, in exchange for the cash payment, the investor assumes the future responsibility for paying the policy premiums and collects the full death benefit.
For individuals with cancer, a viatical settlement can provide much-needed financial assistance to help cover medical expenses, living expenses, and other costs associated with their illness. A viatical settlement offer depends greatly on the policy size and health of the insured. Individuals with Stage 4 cancer diagnosis can often times receive viatical settlement offers of 50%-80% of the death benefit. With the help and assistance of a viatical settlement broker the offers can reach higher values.
A 55 year old male with Stage 4 colorectal cancer cancer had a $500,000 term life insurance policy. The policy was in the 10th year of a 20 year term. The individual used the help of a viatical settlement broker, Life Policy Solutions, and received a cash offer of $400,000, or 80% of the death benefit. The individual used the cash for advanced cancer care out of pocket expenses.
Determine Eligibility: To be eligible for a viatical settlement, you must have a life-threatening illness, such as cancer, and a life expectancy of two years or less. You must also have a life insurance policy with a death benefit of at least $100,000.
Find a Viatical Settlement Broker: There are many companies that offer viatical settlements, so it’s important to do your research and choose a reputable broker or direct provider. Look for a broker or provider that is licensed in your state and has a track record of successful transactions.
Obtain a Viatical Settlement Quote: Once you have found a broker, you will need to provide them with information about your life insurance policy and your health condition. Based on this information, the broker will give you a viatical settlement estimate. The broker will then submit your policy to a network of viatical settlement buyers to obtain the highest offers. The highest offer will specify the lump sum payment you will receive in exchange for your life insurance policy.
Consider Tax Implications: Viatical settlements may be exempt from federal income tax under certain circumstances, but it’s important to consult with a tax professional to understand the tax implications of the transaction.
Accept the Viatical Settlement Offer: If you decide to move forward with the viatical settlement, you will need to accept the offer from the provider. The viatical broker will guide you through the closing process. You will need to provide documentation of your life insurance policy and your health condition, as well as sign a contract agreeing to the terms of the transaction.
Receive Payment: Once the contract is signed, the provider will transfer the lump sum payment to you. You can use this payment to cover medical expenses, living expenses, and other costs associated with your cancer care.
In conclusion, a viatical settlement can be a valuable financial resource for individuals with cancer who are struggling to cover the costs of their care. By following these steps and working with a reputable viatical settlement broker, such as Life Policy Solutions, you can use this financial option to ease the burden of cancer care expenses.