Guide to Viatical Settlements
ViaticalWeb provides information about viatical settlements. We do not buy or sell these settlements. We are a nonprofit consumer resource, providing information about these financial transactions.
Viatical settlements involve an ill person selling his or her life insurance policy to an investor in return for a lump-sum payment.
The investor takes over payments on the policy and is the beneficiary of the policy upon the death of the patient. Although the process may sound morbid, it can be a rational transaction for ill people, providing them with needed money.
Viatical settlements are a purely financial transaction between two parties. We attempt to educate the consumer. These settlements got a bad reputation a decade or more ago (among investors, not among consumers who sold their policies), because of some unscrupulous dealers and over-promised returns. But there is nothing illegal, shady, or immoral about them. In an attempt to recover, brokers or viatical settlements have started calling them life settlements or senior settlements. But these are the same thing as viatical settlements. We have seen brokers insist there is a difference, but there is not.
This site presents some of the history of viatical settlements, how they developed in response to a need.
We also outline the viatical process, or how to viaticate.
We also discuss related alternatives to viatical settlements, which viatical candidates may be interested in. And we look at whether viatical settlements are good investments to buy.
From the consumer standpoint (the person selling his or her insurance policy), viatical settlements offer another tool in the personal finance box. They are not disreputable in any way, and are somewhat like reverse mortgages. They are not risky for the seller once the deal is done. The seller has cash in hand. The settlements may be risky for the buyer because the insured person's life expectancy can change.
They main risk for the seller (insured person) is that you will not get enough money for your policy, which is why you need to comparison shop. If you are interested in viaticating - selling your policy - look around. There are plenty of brokers and viatical investors out there and the prices they will offer vary considerably. Don't be taken for a chump with a low-ball offer.
Some unscruplous buyers may try to offer a very low price because the seller (the viator) is ill and believed to be unable to fight for a good deal. By getting a number of quotes, you can feel confident that you have a decent deal. You can shop nationwide - there is no requirement that the buyer be near you. Just make sure they are not a fly-by-night operation. Contact the state department of insurance.of the state the buyer is in (not the state you live in) and see if there have been complaints about the buyer.