Consider These Options Before You Decide

Consider These Options Before You Decide

A viatical settlement or accelerated death benefit option may be a good source of funds. But you should fully understand how your choice will affect you and your survivors. Before you decide to apply for a viatical settlement or accelerated death benefits, you should:

1) Realize that after your death the policy may not pay your beneficiaries any death benefit. Or it may pay a much lower benefit than you planned when you bought the policy.

2) Think about whether other options would be better for you. You might borrow the cash value of your life insurance policy or cancel the policy and take out the cash value.

3) If you owe money, ask your accountant if your creditors can try to collect what you owe them from your life insurance payouts. Recent federal legislation makes payouts from a viatical settlement or accelerated death benefits tax free, a great benefit to terminally ill individuals.

4) You should contact your personal tax advisor as there may be tax implications under certain circumstances on the sale of a life insurance policy; for example, if you are not terminally ill and you sell your life insurance policy to a viatical settlement provider.

5) Decide how payments from your life insurance will affect your eligibility for programs such as Medicaid and supplemental Social Security income.

Till next time, have a blessed day..