If you have a life insurance policy and no longer need it, then perhaps you’ve heard a little about a viatical settlement and how it could benefit you in this situations like this one.
First things first, it’s important to research your options to find out what’s best for you, and of course, whether or not you even qualify for a viatical settlement. For some people, a viatical settlement is the right option for their circumstances. For others, there are better options.
Below, you can learn more about what this type of settlement is, as well as its benefits.
What is a viatical settlement?
According to Investopedia, a viatical settlement is the act of selling your life insurance policy at a discount for immediate cash. It’s most commonly done after being diagnosed with a terminal disease, when pressing medical payments are a larger concern than the policy’s eventual payout. This is also referred to as a life settlement.
As americanlifefund.com points out, this sale is “for more than its surrender value but less than its net death benefit.” Based on that alone, the amount of money someone can receive for this settlement is based on how much his or her policy is for and the figures mapped out in the policy.
Some of the factors/qualifications could include life expectancy and the size of the policy as well as the type. However, policies vary, which is why it’s important for you to reach out to a company to see if you qualify for a viatical settlement and if it’s the best option for your specific needs and circumstances.
What are the benefits?
Why would someone want a viatical settlement? The main reason is, of course, to acquire a lump sum for the policy. This money can be used for anything and is typically given out to the seller fast.
That’s important because some people need a substantial amount of money as fast as possible to cover the cost of treatment. Not to mention, this money can be used for alternative treatments that your insurance company might not cover. The options after that are limitless, since the cash is now yours to spend.
On top of medical bills, people can use a viatical settlement for other forms of debt, such as a mortgage payment or credit cards. They can use the money to make repairs on a home or buy a new house. They can donate this money to friends or family members in need. They can use this money to reduce stress, since they will have more cash on hand and can use this money to supplement their incomes.
Not to mention, some people no longer have a use for a life insurance policy, or they have multiple policies, and they no longer want to pay the high premiums attached to them. A life settlement can shed people of these premiums and give them cash for the policy right away, no matter what they need the money for: from treatment to living the rest of their lives more comfortably from a financial standpoint.
If you’re thinking about selling your policy, then you should still consider all of your options first, as this is a big decision. That said, a viatical settlement might be your best option if you need money fast, or if you no longer need your policy.