Friday, 24 May 2019
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What You Need to Know About Viatical Settlements – Times Square Chronicles

What You Need to Know About Viatical Settlements

Terminally ill patients who require money for their cost of care while living have a few options for their end of life care. A third-party buys your life insurance for less than the mature value and upon your death, receives the benefits. They then become the effective owner and beneficiary of the policy and make a profit by paying less for the settlement than it will pay at death. However, these settlements actually often only pay out a small percentage of the policy’s value, but these settlements can still be great for helping with palliative care.

How Viatical Settlements Work

Viatical settlements are only available to terminally ill patients who have a permanent life insurance policy. The percentage paid depends on the overall value of the life insurance and the health condition affecting the policyholder.Companies calculate how long the policyholder is expected to live versus the premium cost per month. These companies want to buy policies where the insured is expected to die before paying these monthly premiums becomes cost-prohibited.The viator is the insured person who is looking to sell their policy. This person signs a form to turn over beneficiary rights to the policy to the company. The insurance company is notified of the sell and the change of beneficiary when the policyholder dies.

How Much Do Viatical Settlements Pay

The price you will receive for selling your life insurance policy depends on several factors. The face value of the policy is the chief defining factor. Large life insurance policies will receive more substantial offers than smaller policies.The life expectancy of the insured person is the second-most defining factor. The shorter the anticipated longevity, the more likely you’ll get a higher offer. The age of the insurer is also taken into account. The older you are, the higher the price you will receive for your policy.Most companies prefer to deal with permanent life insurance policies rather than term life insurance policies. However, term life insurance policies can be bought in a viatical settlement. The price offered will be much lower than a permanent policy though.

Pros

  • A viatical settlement gives you immediate access to funds
  • to help with palliative care. 
  • It can provide peace of mind for terminally ill patients who are worried about covering the costs of their care.
  • The process can also be stopped at any point before the contract is finalized. 
  • Most states also allow the agreement to be canceled within 15 to 30 days if all the funds received in the sale are returned.

Cons

  • Your original beneficiary will no longer receive the benefit of the policy. 
  • If your life insurance policy was intended to take care if your family after death, they will no longer receive those benefits.

You should have a qualified attorney assess any viatical settlement before it is arranged. The process can be quite overwhelming and an attorney can help you determine if the offer made is sufficient and whether there will be any complications from arranging such a settlement.

Source: https://t2conline.com/what-you-need-to-know-about-viatical-settlements/

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