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Viatical Settlement

[from the Latin "Viaticum," historically, an allowance for traveling expenses or provisions for a journey] n. The proceeds from the sale of a life insurance policy to a third party by a terminally ill individual. A viatical settlement should not to be confused with an accelerated benefit from the policyholder's life insurance.

Viaticate v.

[Historically, to furnish with the necessary provisions for a journey] v. To sell a life insurance policy to a third party when the individual is terminally ill.

Seller n.

A terminally ill person who sells his/her life insurance policy to a third party and receives a lump sum cash payment.

Viatical or Senior Life Settlement Brokerage Company n.

A company which represents a seller in the settlement process. Typically they advertise their services, assemble the necessary information into a package, submit that package to more than one funding source, and negotiate with those sources on the seller's behalf. The brokers fiduciary duty is entirely to the seller.

Viatical or Senior Life Settlement Funding Company n.

A company that agrees to provide the funds necessary to purchase a seller's policy. The funding company's fiduciary duty is solely to its provider(s) of capital.

Settlement Contract n.

A purchase agreement entered into by a viatical or senior life settlement funding company and a seller. The agreement establishes the terms under which the settlement funding company will produce the funds in return for the assignment or transfer of ownership of the insurance policy.

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