If you have a terminal illness or if you are caring for someone who is terminally ill chances are you're giving a great deal of thought to time and money. You may be thinking about life insurance, too. It’s in that context that you may hear the phrases "accelerated benefits" and "viatical settlements."
Accelerated benefits sometimes are called "living benefits." They are the proceeds of life insurance policies that are paid by the insurer to policy holders before they die. Occasionally, these benefits are included in policies when they are sold, but usually, they are offered as riders or attachments to new or existing policies.
Viatical settlements involve the sale of a life insurance policy. If you have a terminal illness, you may consider selling your insurance policy to a viatical settlement company for a lump sum cash payment. In a viatical settlement transaction, people with terminal illnesses assign their life insurance policies to viatical settlement companies in exchange for a percentage of the policy's face value. The viatical settlement company, in turn, may sell the policy to a third-party investor. The viatical settlement company or the investor becomes the beneficiary to the policy, pays the premiums, and collects the face value of the policy after the original policyholder dies.
The daily physical and emotional demands of a terminal illness can be overwhelming, and financial burdens can seem insurmountable. If you are considering making a viatical settlement on your life insurance policy—or if you are helping someone with this decision—these consumer guidelines should help you avoid costly mistakes and make the choice that's right.
Links listed below are not endorsed or guaranteed by us in any way. We encourage you to follow the guidelines above and check these businesses out before following through on an offer. There are some businesses that engage in fraudulent activity in the viatical industry. Make sure the one you contact is credible.
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