What Is a Viatical Settlement And When To Use It

Know About The Viatical Settlement

Life insurance Viatical Settlement

Many people who hold Life Insurance Policies may not have heard of the term Viatical Settlement and for that matter will not know what is a viatical settlement. How a viatical settlement comes to be of great value to you is this: Your life insurance policy can be sold by you to a third party. The owner of the policy can sell that policy for a percentage of the death benefit value, the buyer that has the responsibility to pay all future premiums and in return collects the full death benefit when the insured has passed away. This is a good option to pursue with people who have terminal illness and may be experiencing stiff financial problems.

One other benefit of a Viatical Settlement is that if you are a healthy policy holder and you are no longer interested in the policy and wants to opt out of paying those premiums.and wishes to get more cash other than the surrender value of that life insurance policy. In a life Insurance settlement, the insured is re-underwritten, and any offer made for the policy based on their current life expectancy. This can be more than the surrender value. There are however certain steps you should follow before you get all head over heels and decide to go sell you policy. Follow these simple guides listed below:

Gain as much knowledge and Information regarding Life Settlement

• The more familiar you are with this financial instrument, the better your choices and decisions will be when it comes on to getting the right value for your settlement. Speak with your insurance agent about settlements and of course the viatical settlement. Try and see if you can find out also about any financial laws that stands as it relates to insurance policies and settlements.

Seek Financial Advice

• Not many people have a financial adviser, but you can always seek the service of one who will look into your current and future financial state and give you sound advise as it relates to you financial needs.

Life Insurance Settlement

From my own experience and knowledge, sometimes we may have other sources of cash that we sometimes forget about or probably do not know that that instrument may have some sort of cash value. Selling your life insurance policy should always be your last option when it comes down to needing cash for any form of expenses. Look at all other avenues to see if you have any money hanging around before you go viatical settlement. You must also look at what selling for a viatical settlement means and what are the consequences of selling.

Your Financial Options

• Do you have any cash value in your insurance policy? If so, you  may use some of the cash value to offset your immediate needs and keeping your policy in force for sometime.
• Some life insurance policies have an accelerated death benefits provision. It pays you a substantial portion of your policy's death benefit.
• First know that the proceeds are subject to the claims of any creditors.
• Find out whether receipt of a cash settlement would cause you to drop any public assistance benefits like food stamps or Medicaid.(law)
• You are obligated to provide certain medical and personal information.

Settlement Tips

• Find out as much as possible about how the process works from start to finish and time periods.
• If you choose to go through a settlement broker, you need to do comparison shopping. Remember that all brokers charge different rates and some are much knowledgeable than others.
• Check all application forms for accuracy.
• Make a decision whether to sell your policy directly to a life or viatical settlement provider or go through a settlement broker who would do the comparison shopping for you.
• Also be sure that the giver agrees to put your settlement proceeds in escrow with a financial institution to make sure that your funds are safe during the transfer.
• Find out what are the consequences of deterring to viatical settlement. Meaning if you change your mind after the sale is complete.

Once you are satisfied with your financial transaction and everything is crystal clear to you and you have no other option but to sell your insurance policy then  go ahead and do so. Never sign off on any transactions which you have strong doubts or uncertainty about.