Personal Finances

Risk and Reward: Is a Viatical Settlement Worth It?

An estimated 54% of Americans have some type of life insurance. Policyholders typically purchase life insurance to provide financial security for their loved ones in the event of their death. However, owners of life insurance policies may also choose to sell their policy to a third party.

There are two main types of transactions that allow policyholders to sell their life insurance: viatical settlements and life settlements. Indeed, the viatical settlement vs life settlement is a common one.

In today’s blog, we’ll focus on viatical settlements. In particular, we’ll show you why opting for a viatical settlement is a good move.

You Can Access Cash to Pay for Medical Expenses

When you have a terminal illness, medical bills can quickly become overwhelming. Unfortunately, many health insurance policies have limits on how much they will cover. Selling life insurance policies provides a large sum of money that patients need.

This accelerated death benefit can then be used to pay for medical expenses, making it easier to manage finances during a difficult time. In addition, a viatical settlement can provide peace of mind by ensuring that medical bills will not become a burden for loved ones after the policyholder passes away.

You Enjoy Tax Benefits

One of the most important benefits of viatical settlements is that the money you receive is tax-free. When you’re terminally ill, every dollar counts. The last thing you want to worry about is how you’re going to pay your taxes on the money you receive from a viatical settlement. 

Thanks to life insurance settlements, policyholders don’t have to worry about taxes. They can rest easy knowing that the money they receive will go toward taking care of themselves and their loved ones, not the IRS.

You No Longer Worry About Premiums

One of the great benefits of a viatical settlement is that the buyer pays all remaining premiums

For someone who is terminally ill, this can be a huge relief. Imagine being diagnosed with a terminal illness and then learning that you have to keep paying your life insurance premiums. 

It would be an added stress at a time when you are already dealing with so much. But with a viatical settlement, you can sell your policy, and the buyer will take over the payments. This means that you don’t have to worry about it anymore. 

You can focus on your health and spending time with your loved ones without the added burden of premiums.

You Get to Ditch the Hassles of Medical Underwriting

Bypassing medical underwriting means that terminally ill policyholder can sell their life insurance policy without having to go through a lengthy and intrusive process of providing medical records and undergoing a physical examination. 

This benefit is particularly welcome for those who are facing a terminal diagnosis and who want to have the peace of mind of knowing that their financial obligations will be taken care of without delay.

In addition, it can also be a relief for those who do not want their family or friends to know about their diagnosis.

Reap the Benefits of Viatical Settlements

While it’s always reassuring to know you have life insurance, a time may come when selling your policy makes the most sense. For terminally ill policyholders, viatical settlements provide much-needed cash from their policies to cover financial needs.

Did you enjoy this article? Keep visiting our blog for more exciting content.


About Author