What Is the Difference Between a Viatical and a Life Settlement?

According to a recent study, more than half of Americans have some form of life insurance. The choice to get insurance to safeguard dependents and loved ones after your passing is a popular one. But, what do you do when the service no longer works in your favour? Sometimes a bird in the hand is worth two in the policy papers, so to speak. That’s where life settlements come in. 

What is a Life Settlement?

What is a Life Settlement? It’s the sale of a person’s life insurance policy. Generally done by older people (65 years of age and above), the policy is sold to a third-party for more than the termination payout of said policy, but less than the death benefit. The precedent for this was set in 1911 when the Supreme Court case, Grigsby v. Russell, ruled that life insurance policies possess all the characteristics of property items. Because of this, life insurance was established as a transferable item. It’s a safe, legal process.

What’s a Viatical Settlement?

Just as the policies being traded, Life Settlement isn’t the same all around and it needs to be handled on a per-person basis to get the best terms and conditions for the individual. This includes the consideration that is given to the current state of health of the policyholder. This is especially true in cases of terminal illnesses. That’s where a Viatical settlement comes in. 

Who qualifies for one?

A person who is terminally ill or has a life expectancy of fewer than two years qualifies. A person is considered to be terminally ill if he or she has an incurable condition that can be reasonably expected to lead to death. Usually, the term refers to people with a remaining life expectancy of a few months. This can extend to patients with a life expectancy of fewer than two years. This includes conditions like HIV/AIDS, Lesch-Nyhan syndrome, heart diseases like severe coronary artery disease, leukaemia, and most commonly, cancer. These are all progressive conditions that often become terminal. 

Why should you consider one?

Living with these is hard enough, but when faced with impending death, some people might decide that the money is better utilized at the moment. Things like an inability to continue payments on the insurance premiums (which might lead to loss of the policy) or the loss of beneficiaries to the policy. Sometimes, even just paying for medical care to ease suffering can be a challenge. In cases like these, the sale of one’s policy can help relieve financial stress from the policyholder or more often, his or her benefactor/caretaker. A settlement like this can be processed irrespective of age. 

How can you go about it?

So, how does one go about getting a Viatical settlement? Despite earlier stating the process is legal, it isn’t without risk. Like with all things regarding money, caution is advisable and critical to achieving mutually beneficial terms. If you or a loved one find yourself in a situation that requires you to seek a settlement, Viatical settlement companies are your best bet to carry it out risk-free.

The Benefits.

What are the advantages of dealing with a settlement company? There are quite a few. First off, these settlement companies have to be certified (and thus are credible and trustworthy). This is much safer than dealing with an unaccredited third party and is even easier. This is because settlement companies have a wealth of experience in every stage of the procedure, from analyzing your policy to the final payout. 

More importantly, they’re effective. They offer large sums of interest-free cash within a short period, leaving you free to enjoy the time you have with your family, stress-free. They’re easy to understand and work with and to top it all off, with the Viatical settlement, there’s no tax imposed. So, you truly get your money’s worth. 

So if you or a loved one suffer from a terminal illness and need financial assistance with treatment, or even if you just the extra funds needed to spend time together, look into getting a Viatical settlement today.

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