Difference Between Viatical & Life Settlement

There are instances when people choose to opt for life settlements; there are two main reasons behind this choice. They include: people no longer wanting a life insurance policy, or they can no longer afford the policy. This article provides answers to questions like, “what is a viatical settlement?” and “how to select life settlement companies.”

Viatical Settlements vs. Life Settlements:

Even though viatical and life settlements may seem to have the same features, they are slightly different. The feature that they have in common is that both of them involve selling life insurance policies.

A vatical settlement is done when a person wants to sell off an existing life insurance policy. This settlement is usually offered when the person insured is suffering from a terminal illness. it’s designed for people who have only two to four years of life expectancy remaining.

This kind of settlement may sound a little harsh, but it’s actually quite useful because the family or kin of the insured are not left behind with expensive hospital bills once the patient has passed away. The basic idea behind a viatical settlement is to pay the medical bills during the life expectancy period- in this case, two to four years.

A life settlement – This is a very common type of settlement; it involves a trade between the insurer and the customer. This settlement is for people who are healthy and can have a longer life expectancy. Life settlements are preferable because they allow the insured to obtain cash, and in return, they get to enjoy financial assistance and also have a choice of spending the funds however they want to.

The benefit of a life settlement is that with retirement in the near future the insured will gain more returns than if they had to give up the policy or let it lapse.

When Does a Life Settlement or Viatical Settlement Come Into Play?

There are several events that can bring a life or viatical settlement into play. Some of them include:

  • A policy is about to expire/lapse
  • The insured no longer needs coverage
  • The insured doesn’t have any heirs
  • Insured is looking to settle their assets

How to Choose a Life Settlement Provider

When you’re looking for a life settlement provider always make sure that the company is legitimate. This means that they have to have the proper documents and licenses to purchase life insurance policies on behalf of institutional stockholders. For a company to achieve even a single third-party life insurance policy every year, it should be a licensed life settlement provider. Occasionally, a provider also happens to be the investor. 

All good life settlement organizations make use of life settlement providers for the purpose of initiation. Life settlement agencies have experts who evaluate the investment potential for a life insurance policy and based on the data collected they make bids for the policy based on its characteristics, the insured’s life expectancy, and the interest rate.

What to Keep in Mind Before Deciding on a Life Insurance Settlement

It’s important that you always consider all the choices that are offered to you and examine them thoroughly. Don’t let your life insurance expire and don’t agree to surrender the value of your insurance until you have researched all your options.

Life settlement agencies will help you obtain the most cash from your insurance policy. By maximizing the value of your settlement, you can turn the unwanted policy into cash that you can put towards current expenses.

Get Cash for Your Life Insurance Policy

As long as you take the help of a reputable life settlement company you don’t have to worry about the various procedures that go into a life settlement. Here at Harbor Life, we deal with life settlements every day, and offer over 30 years of experience in the life insurance industry. We handle all the legal formalities of the sale; and ensure that you get the maximum return from your policy. Our services are free and there’s no obligation. Talk to us today (800-694-0006) and discover the value of your life insurance policy.

Related Posts

Leave A Reply