viatical settlement

n (Insurance) the purchase by a charity of a life assurance policy owned by a person with only a short time to live, to enable that person to use the proceeds during his or her lifetime. See also death futures

Thesaurus

Noun	1.	viatical settlement - cash derived from sale of an insurance policy by a terminally ill policy holderadvance death benefit - a percentage of death benefits paid directly to policy holders having a short life expectancy (usually 6 months)
	2.	viatical settlement - sale of an insurance policy by a terminally ill policy holderviaticus settlementliquidation, settlement - termination of a business operation by using its assets to discharge its liabilities

viatical settlement

Viatical Settlement

A transaction in which a life insurance policy holder sells his/her policy to a third party. The situation occurs when the policy's fair market value exceeds the cash surrender value that the insurance company offers. The third party is known as a life settlement provider, who, in the United States, must abide by applicable state regulations. The life settlement provider becomes the policy's new beneficiary, is responsible for maintaining premiums, and upon the death of the insured person, receives the benefit. The secondary market for life insurance began growing in the last part of the 20th century. In a viatical settlement, the life settlement provider is speculating on how long the insured person will live; indeed, it is in the life settlement provider's financial interest for the insured person to die as soon as possible. A viatical settlement is also known as a life settlement.

viatical settlement

The purchase of a terminally ill person's life insurance policy for a certain percentage of the policy's face value. The amount paid depends on the size of the policy and the length of time the policyholder is expected to live. The company that purchases the policy begins paying the premiums at the time of purchase and collects the death benefits when the insured dies.

Viatical settlement.

Technically speaking, a viatical settlement occurs when a life insurance policy is sold for cash to a third party before the original owner dies.

Most viatical settlements involve terminally ill people with life expectancies of less than two years who choose to sell their life insurance policies to raise money for their medical care.

In a viatical settlement, the third party pays the former policy owner an amount that is typically more than the surrender value of the policy, but less than the death benefit. When the insured person dies, the new policy owner collects the death benefit and makes a profit on the difference between the amount paid to the insured and the amount paid on the claim.

Some businesses specialize in viatical settlements, and may resell them as investments, arrangements that are regulated by the state in which the policies are sold.

Because viaticals are controversial, more complex than they seem, and have been aggressively and sometimes misleadingly marketed, both people considering selling their policies and people considering investing in them are advised to proceed with caution.

viatical settlement

viatical settlement

viatical settlement

viatical settlement

viatical settlement

Viatical Settlement

viatical settlement

Viatical settlement.

viatical settlement

Synonyms for viatical settlement

noun cash derived from sale of an insurance policy by a terminally ill policy holder

Related Words

noun sale of an insurance policy by a terminally ill policy holder

Synonyms

Related Words