Frequently Asked Questions

For what reason would a person choose to viaticate a life insurance policy?

A terminal illness or catastrophic life threatening illness not only deprives a person of the ability to work and earn  income to take care of themselves, but it also rapidly exhausts any savings that may have   been put aside. When this happens, a viatical settlement allows a  person to;

• continue receiving quality health care;
• ease financial strain
• live with financial  independence
• retain control over their own life; and live a quality of life not     affordable to  someone on public assistance.
• A survey of viators revealed that they had used their proceeds for a broad spectrum of different purposes including:
• continuing   the highest quality health  care possible.
• relieving the financial stress concerning bills, rent, or            mortgage payments,  car payments, and in many instances    retiring all of their debts.
• distributing the proceeds of their viatical settlements to    whom they  wish: friends, life partners,loved ones,
• spouses, charitable institutions,  to name only a few--and     having the  peace that comes with knowing  the proceeds     are distributed according to the viator’s wishes, while     allowing  the viator to share in the joy of those receiving the gifts.

Every viator will be different when it comes to the use of the proceeds; however, all are the same when it comes to the stress relief which enables them to live a better quality of life and to die with dignity as a result of having chosen to sell a personal asset, their life  insurance policy.

Can a viator sell only a portion of a policy while maintaining selected benefits for a primary beneficiary?

Yes. The viator may request an irrevocable beneficiary designation for a portion of the proceeds to be assigned to viator's beneficiary or beneficiaries of choice. In this case, upon the death of the viator, the insurance company would pay the benefits designated directly to the named beneficiary(s).

What types of life insurance policies qualify for viatical sales?

In general, any life insurance can be sold: whole, universal, or term; group or individual.

What provisions in a policy could prevent a viatical sale?

Should a policy contain a contestability period or have a suicide exclusion in effect, then it would be very difficult to viaticate the policy until the necessary time period has elapsed. Also should a policy not allow for the transfer of ownership to a third party, then it would be impossible to viaticate the policy.

What are the purchasing requirements of viatical settlement funding companies and how much can the viator expect to receive in viatical settlement proceeds for his/her policy?

In general, viatical settlement funding companies pay between 50% and 87% of the policy's face amount. Each funding company has its own set of underwriting criteria upon which it bases its bids; however the purchase price paid by a funding company will be based upon the anticipated life expectancy of the viator (the shorter the life expectancy, the higher the bid); the annual premium; the type of policy and the rating of the life insurance company; the market rate available on similar investments; and whether the policy is beyond the contestability period which is generally accepted in the industry as two years from the date of issue or reinstatement (if it has ever lapsed).

Does the viator continue to pay the premiums after the viatical sale is complete?

No. Upon completion of the viatical transaction, the viator's rights and responsibilities for premium payments on the policy cease.

Does the viaticating of a policy affect other personal or group insurance benefits of the viator such as disability or health?

As a general rule it does not, but we encourage each situation to be checked on an individual basis.

Does the viator have benefits available from his/her own insurance company?

In some cases the viator's insurance company may offer accelerated benefits or have a living benefit rider. If the viator qualifies, the insurance company will pay a certain percentage of the total benefit if the viator meets certain requirements(i.e., 6-12 month life expectancy). In most cases, the insurance company will pay an advance of 50%, leaving the remainder for the named beneficiary.

Do all viatical settlement funding companies offer the same net proceeds?

No. Bids will vary as result of the funding company's assessment of longevity, ratio of premiums to proceeds, insurance criteria, and other criteria particular to each funding company or compound company.

How long does it take a viator to receive the proceeds of a viatical sale?

Generally, the process takes 4 to 8 weeks,  from the date of the receipt of a viator's completed application to the date of transfer of the viatical proceeds to the viator.

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