Viatical settlements encompass selling of life insurance policies of individuals that are terminally ill to a company that pays a lump sum amount of money in return for the policies issued. These companies buy the polices at a price lower than the face value indicated in the policy the purchasing price is usually as low as 50% of the face value. The company takes the ownership of the policy and gets compensated when the policy older die.
This settlement can be a source of relief to individuals with terminal illness that their life span has been predicted not to be more than two years. This is a high risk transaction, since the seller may live more than the expected period of time. In this case, the buyer stands a chance to lose. This is so because; the longer the viator lives the lower the compensation.
A terminally ill individual may decide to sell the policy so as to raise money to get relief from financial strain he or she may be undergoing through. Another reason for selling the policy is to raise money for the relatives.
There are several privately owned insurance companies that buy these life insurance policies. After purchasing these polices they become the beneficiaries immediately the original policy holder dies. Before one sells his or her policy, it is important that she establishes whether the company buying the policy is a broker or n insurance company. Broker companies do not represent the best interest of the viators.
Each and every company has its own rule of buying these policies. Usually, they conduct a checklist in each and every policy. They usually ask for permission to conduct analysis of the medical records of the policy seller. It is advisable for one that is selling the policy to an insurance company not to accept payments in terms of installments. One should also ensure that there are no hidden fees on the same.
One should conduct a research online on the most reputable and reliable viatical settlement companies. A person should visit various websites to compare the quality of viatical settlements they provide.