Life Settlement versus Viatical Settlement

I got an email yesterday from someone who just wanted some basic information pertaining to the difference between a life settlement and a viatcial settlement.

Here is some basic information:

A viatical or life settlement is the sale to a third party of an existing life insurance policy for more than its cash surrender value but less than its net death benefit. Regulatory usage of the terms “viatical settlement” and “life settlement” varies by state. However, the market generally uses the term viatical settlement to refer to instances where the insured is terminally ill with a life expectancy of less than two years. A life settlement focuses on policies insuring older individuals with life expectancies greater than two years.

If you need more detail on each type of transaction, contact us.

Until next time, have a blessed day.