A life settlement is the process of selling a life insurance policy. Although it may sound fairly straightforward, there are a few different types of settlements: life and viatical.
Oftentimes, viatical and life settlements are used interchangeably. However, there are slight differences between the two terms. The main difference between the two types of settlements is simple: the viatical option is for those who are terminally ill and only have a life expectancy of a few years. A life settlement doesn’t operate on a specific life expectancy.
No matter if you’re an agent working to sell a life insurance policy on behalf of your client, or you’re looking into selling your own life policy, knowing the difference between these two terms is important moving forward into the life insurance settlement process.
If you’ve been confused about the difference between life settlements and viatical settlements, you’re in the right place. In today’s blog post, we’re going to be diving into the two terms to learn about the subtle difference between the two. Be sure to read along, and if you have any further questions in regards to selling an insurance policy or joining our team of settlement agents at Global Life Settlements, contact us today.
What Is A Life Settlement?
A life settlement is simply the sale of an insurance policy from the policyholder to the investor/purchaser. Life settlements are designed for those who may not necessarily be ill, but who want to enjoy their retirement years stress-free, and do so with an extra income. By opting for a life settlement, the policyholders are free to use the funds they earn in the sale however they please. Whether they have medical expenses they need to pay off, like assisted living or medical bills, or they simply want to have an extra income to spend on a boat, retirement home on the beach, or for traveling purposes, they’ll have the financial freedom to do so without worrying about paying those monthly premiums.
What Are Viatical Settlements?
On the other hand, a viatical investment or settlement is the process of selling an existing life insurance policy when the insured individual is terminally ill. These types of settlements are set up for those who have a two to four year life expectancy remaining. The point of opting for a viatical settlement rather than a life settlement is so that the family members of the ill individual have the funds available to pay for expensive medical bills, before and after the sick family member passes. Medical expenses can add up, especially so if the insured is terminally ill, and selling a life insurance policy can provide an extra pool of funds in order for those bills to be paid off efficiently.
Should You Sell Your Life Insurance Policy?
Are you wondering if you qualify for a life settlement? There are a few qualifications for selling a life insurance policy to an investor. First and foremost, you’ll need to find out if your policy holds value and is marketable to investors in the secondary market. These depend on a few different qualifications, including your health, premiums and payments, maturation, and low cash value unencumbered by loans, among others. Visit our site or contact us at Global Life Settlements to learn more and to see if you qualify to move forward in the settlement process.
Contact Us Today
Whether you’re looking to sell your own policy, or you’re wanting to become an insurance settlement agent through Global Life Settlements, do not hesitate to reach out to our team. We are here to answer any questions you may have regarding all aspects of life settlements. Give us a call today.