With a significant increase of interest from major institutional buyers there has never been a better time to pursue a viatical settlement. The amount of cash offers to policy owners has been steadily increasing which means higher cash settlements for policy owners. When considering the sale of your life insurance through a viatical settlement it is important to understand if you qualify and how much you should expect.
Understanding A Viatical Settlement And Getting Cash Offers!
Viatical settlement VS Life Settlement
What is a Viatical Settlement?
Viatical Settlement is often confused with Life Settlement. The term most commonly used to reflect the sale of life insurance policies has historically been viatical. However, the majority of policies sold are through Life Settlement transactions. The major difference between the two is that an insured must have a certified life expectancy of two years or less for the sale to be considered a Viatical Settlement. The cash offers made for a Viatical Settlement are generally much higher than those made for a Life Settlement, however, there can still be substantial value for policy holders selling their policy in either case.
Is The Viatical Route For You?
Are You A Candidate?
Where with a Life Settlement, insured age is a major determinate of eligibility, Viatical Settlement has no age limitation. Unfortunately, terminal illness can happen at any age. The major criteria to qualify for a Viatical Settlement is a life expectancy of under two years. Policy premium, medical advancements & other factors are considered, however, with a qualified life expectancy it is much more likely a policy holder will receive substantial offers for their life insurance.
Why Cash In On Your Policy?
Travel With Family
Pay Medical Bills
No Longer Needed
The Viatical Process
The underwriting and pricing process is the same for Life & Viatical Settlement. The first step is contacting LIS Guide to begin working with a licensed vitatical settlement broker who will gather all the required information and submit to as many buyers as possible. The process is not simple, but with the proper guidance it is as stress free and hands off as possible for you. Beginning the process costs nothing and at the very least can give you the peace of mind knowing how much value your life insurance policy holds.
How Much Should I Expect?
The major qualification for a viatical settlement is having a life expectancy (LE) under two years. Typical cash offers for Viatical Settlements range from thirty to eighty percent of the policy face amount. These offers are much higher than a more common Life Settlement due to the short life expectancy.
Viatical Settlement Taxation
While the proceeds of a life settlement may be subject as ordinary income to tax, the proceeds of a viatical settlement (someone with less than a two (2) year life expectancy) are not typically subject to tax. This was enacted with the 1996 Health Insurance Portability & Accountability Act that deemed both chronically & terminally ill viators exempt from tax on proceeds on the sale of their life insurance. There are guidelines around how someone qualifies for the “chronically ill” exemption, and it is important to note that viatical settlement proceeds are only tax-free if a qualified viatical settlement provider completes the closing on your life insurance. While there are different opinions about viatical settlement taxation, these are all concerns your broker will be aware of and help guide you through.
Getting started on your Settlement
With the help of a LIS Guide licensed viatical settlement broker the process of selling your insurance through a viatical settlement is made simple. These brokers exist to help guide you through the process, cover the costs involved, and make sure your policy is sold for top dollar. It is your time to find out how much cash your insurance policy is worth.
