The concept of viatical settlements works on the premise that a person with a terminal disease can sell his life insurance policy for less than the face value. The person can get lump sum cash and the buyer can collect the benefits of the policy after the original policyholder’s death. It sounds a bit grim but then there are always the harsh aspects of life. The longer the life expectancy, the less expensive the policy. But then life rarely follows a logical road and so the element of risk is there if the original policy holder’s life expectancy increases with the passage of time. It is after all a gamble on death. If the seller dies sooner than expected, you collect a higher return and on the other hand, if the person lives longer than expected, you will collect a lower benefit. Added to this is the fact that you can also end up losing your principal investment if the person lives long enough and you have to pay the additional premiums.
Given the above scenario, the question arises why opt for the viatical settlements. The advantage to the viator (seller) is that he can get lump sum settlements to ease the financial strains of his final days. The buyer gains, and here there is no guarantee, by becoming the beneficiary of the policy. The investor can buy the policy at a reduced rate of the actual face value, which can at times be 50% of the actual value. It then becomes his responsibility to pay the remaining premiums. Upon the viator’s demise the buyer can collect the benefits. If the person survives beyond the expected time, the investor stands to lose upon the investment.
There is an element of risk involved for both the parties. The viator can end up selling the policy at too low a rate. The investor stands to lose if the viator outlives the predicted life expectancy. The investor also has to face the risk of the insurance company going bankrupt. There are also chances that the insured had committed some sort of a fraud while filling in the life insurance application and so the insurance company may not be in a position to pay up the benefits.
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Senior Viatical Settlements
10 August 2010 8:30 PM |
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Senior settlements are different than viatical settlements. Viatical settlements involve the selling of the life insurance policy by a person who is terminally ill and whose life expectancy has been predicted to about two years or so. The policyholder may need cash either to ease...
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Viatical Settlement Companies
10 August 2010 8:30 PM |
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Death may be the only sure thing in life, and gambling on it may sound disconcerting to many. Viatical settlements involve selling the life insurance policy of a terminally ill person to a company who pays a lump sum cash amount in return for the...
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Viatical Life Insurance Settlements
10 August 2010 8:30 PM |
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The physical and emotional demands of a terminal illness are traumatic enough – both for the person and for the near and dear ones. Financial strains only serve to compound the trauma. Viatical life insurance settlements, if handled carefully, can provide financial relief. The process...
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Viatical Settlement With Life Insurances
10 August 2010 8:30 PM |
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Viatical settlement originated from the Latin word ‘Viaticum’, meaning the Eucharist given by a priest to a dying person. Viatical settlement therefore refers to the purchase of the life insurance policy before the maturity date or the death of the policyholder. In it a lump...
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Bonded Life Insurance Settlements
10 August 2010 8:30 PM |
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Bonded life insurance settlements are settlement for insurance policies that are provided by bonding companies. For a premium, these companies promise to buy out the purchaser’s interest in the policy at face value, in case the policy does not mature by a particular date. Bonded...
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Viatical and Life Settlement Association
10 August 2010 8:30 PM |
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Viatical settlement involves the selling of the life insurance policy of a terminally ill person, whose life expectancy has been predicted to two years or so, to any unrelated investor. The investor buys the policy at a reduced rate based on the actual face value...
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Viatical Settlement Providers
10 August 2010 8:30 PM |
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A viatical settlement involves the selling of a life insurance policy by a terminally ill person to unrelated investors who can be private funding companies or brokers. These companies or brokers buy the policy at a reduced rate based on the face value of the...
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Viatical Settlement Brokers
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Viatical settlement involves the selling of a life insurance policy by a terminally ill person to unrelated investors who can be banks, private companies, or brokers. The seller gets a lump sum amount as cash payment while the investor gets the death benefits on the...
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Senior Life Settlements: An Introduction
10 August 2010 8:30 PM |
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A Senior Life Settlement means the sale of an insurance policy to a third party at a value less than the face value of the policy. The buyer of the policy is liable to pay all future premiums on the policy, while the original holder...
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Life Insurance Settlements
10 August 2010 8:30 PM |
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Before discussing the benefits of life insurance payments, it is important to get a clear idea as to what life insurance settlements really are. Simply put, a life insurance settlement is the cash which is given to a policy holder in exchange of the ownership...