When someone finds themselves near the end of their life, they find themselves figuring out what lies ahead for not only them but their family. Some terminally ill patients opt for a viatical settlement to turn their life insurance into a lump sum cash payment now. By entering the viatical settlement process, a patient can take the funds to put towards medical expenses, paying down outstanding debts, or even having some cash for loved ones to enjoy while you’re still here. Here are a few tips to consider when looking into the viatical process.
1. Choosing the Right Broker
When opting to sell your life insurance policy, it’s important to find a viatical settlement broker who is going to hold your hand every step of the way. A broker will lay out the process, pointing out prospective viators who effectively take over your insurance policy. These viatical companies will work to get you a lump sum payout as quickly as possible, with a settlement amount that will be a lesser cash value than the death benefit of your life insurance policy, but larger than the policy’s cash surrender value.
Viatical settlements are often reviewed as an option for a person with a terminal illness. It may be in their best interest to use the settlement towards outstanding medical expenses for those dealing with different types of cancer. With terminal colon cancer, liver cancer, or cervical center, a patient may want to even use the payout towards experimental treatments beyond chemotherapy. Those treatments may not be covered by a health insurance company, requiring out-of-pocket spending to treat this cancer.
2. Weighing Your Outstanding Debts
A life insurance policyholder may want to consider how much they are spending on their insurance premiums compared to how much they can receive from a viatical settlement now. Depending on their life expectancy and the diagnosis, a patient with a terminal illness may opt to capitalize on a viatical to put towards paying off outstanding debts now, as to not leave loved ones having to take the fiduciary duty of those payments. Looking at these numbers is the best way to consider when it’s time to look into the viatical settlement process.
This also holds true if you are looking into treatment options for your illness. A lump-sum payment can go towards a new cancer treatment or even towards travel to explore those other possible treatments that may not be approved in certain regions or countries to help combat the disease.
3. How to Use the Viatical
Depending on your existing life insurance policy and your current financial circumstances, you may want to weigh life settlement payouts like a viatical in comparison to when your beneficiaries will receive the death benefit upon your passing. A viatical settlement provider will lay out the options presented, as well as eligibility concerns for each individual policy. For some opting for viaticals, they may want to consult with a financial planner to decide what’s best to do with the payout.
This will allow a policy seller to figure out how to use a viatical settlement to their benefit while they are still here. This can range from using the life settlement transaction to invest in other forms of treatment, alternative medicine, or to consider expenses for end-of-life care. Some viatical settlement recipients may use that money to provide a financial cushion for loved ones upon their passing. In some cases, a policyholder can turn that viatical into a once-in-a-lifetime opportunity, such as a grand vacation for one last fond memory. One of the main benefits of a viatical settlement is that you can take the funds, and use them towards whatever you desire.