Viatical Settlements {PPP}

We thought a short summary of viatical settlements might be useful as this is an obscure area of the insurance business.

In its simplest form, a viatical settlement is the purchase of a life insurance policy from another for a lump sum payment with the expectation that the money will be recovered upon the death of the insured. It is most typically used where the insured is terminally ill, and is designed to provide funds for the terminally ill insured prior to death with the purchaser getting the money back after death.

Viatical settlements (and related life settlements) are relatively new and developing. Care is required in considering a viatical settlement transaction, and it is important to pick your viatical firm carefully. Additional information is available to all at Life/Viatical Settlements


To break it down: Life/Viatical Settlements
takes the $100,000 pay out and discounts it the number of years of estimated life you have. The rate they use will be the prevailing interest rate on government bonds, plus an amount for the credit risk of the insurance company, plus an amount for their profit, plus an amount for the uncertainty of your life span. You get the net amount. The company becomes the owner and beneficiary of the life insurance policy on your life. When you die, they get their money and their profit.
If you are the one with medical bills, some insurance companies have started to offer Viatical Settlements directly without going through a third party. It is always worth talking to them to see .