How Do Viatical Settlements Work?

Why would I want to take advantage of a viatical or life settlement?

If you have been diagnosed with a critical or life threatening illness and find that you need extra funds to maintain your lifestyle, a viatical or life settlement could be the option you need to make sure you have the monies that are necessary to help you pay everyday expenses or medical expenses.

How do Life Settlements (Viatical Settlements) work?

If you are the owner of a life insurance policy and you have a need for immediate cash, you can contact a provider, a provider representative or a broker who will ask you to fill out an application as well as medical release forms which will be provided to your insurance company and your physician to obtain information about you. This information will then be used to make an offer for a cash settlement on your policy. If it is approved and you accept th4e offer made you will be asked to sign a life settlement contract.

Do I have to liquidate my entire policy or may I keep part of it?

You are free to determine how much or how little of your policy you are willing to surrender. If you chose to liquidate only part of it, you will be required to transfer/assign that part to the new owner of the policy. If you choose to liquidate the entire policy then the new provider becomes the owner of the entire policy.

Who will send me the money from the settlement and how long will it take?

Generally speaking providers of settlements will use an escrow agent or a trustee who will send you the funds within three (3) business days of the confirmation of the transfer of the policy to the new owner. Occasionally the funds will come directly from the provider - all cont5racts and papers required must be complete before funds are released to you.

Can I change my mind?

You have two (2) opportunities to change your mind - first you can cancel prior to receiving any funds and secondarily for up to fifteen (15) days after you have received funds. Once you change your mind you need to return 100% of the funds you have received back to the provider, along with notification of rescission and request in writing that the provider transfer ownership of your policy back to you.

What rights does the new owner have?

The new owner of your policy has the right to check on your health status. This is accomplished by contacting you directly or a person whom you have appointed to take these calls. The new owner may also contact your health care professional. These calls are limited to one (1) every three (3) months and may occur no more frequently than that.

What other options are available to me?

You should check with your life insurance company to see if they offer accelerated death benefits, loans or see if you have the ability to surrender your policy for its cash value before you enter into any life settlement agreements.