What is a Viatical Life Insurance Settlement?

A viatical insurance settlement is an agreement in which a third party pays the life insurance policy holder for the right to be the legal beneficiary of the policy. In most all cases viaticals and viatical providers will pay a large percentage of the cash value of the policy, and in most cases they agree to continue to pay the premium on the existing life insurance policy until the death of the insured.

What are the differences between a Viatical Settlement and a Senior Settlement and a Life Settlement?


The Viatical settlement, Senior settlement, and Life settlement all provide the same service to the insured individual. Though, in most cases the viatical settlement is used in the case of a terminal illness for which life expectancy is less than 3 to 5 years. The Senior settlement and Life settlement are identical and are used for those senior adults who have reached the retirement age of 65 years who are considered to have for whatever reason a shortened life expectancy. Remember that the Senior and Life settlements are not necessarily for those who are considered terminal. In many cases, these policies are used for those seniors who have a whole life insurance policy and just need the extra living expense to get by.

What does the word Viatical mean?

The word viatical comes from the Latin word Viaticum, which means to be given a stipend or a living expense for your journey or travels. The origin and meaning of this type of policy is fitting because if the best viatical policy is selected, it can truly serve as a living wage for the rest of your journey on this side of eternity.

How do I pick the best viatical life settlement broker?

Sadly the Viatical industry is more infirmed then most of those in need of a viatical company or broker. Some people don’t care about the insured and are just looking to make a quick buck. In most cases if you are approached by a viatical broker, you should just walk away. Please make sure you have spoken with your loved ones, rabbi or minister before signing anything. You most certainly do not want to get taken advantage of, so seek wisdom before making any arrangements to sign over your life insurance policy. Often times an attorney who specializes in viatical agreements is a great resource and will help you during signing of the contract. What ever you do, you should find an attorney who is not tied to or that was recommended to you by your viatical broker. Also, make sure the attorney is willing to work pro bono/free. If you are critically ill the last thing you need is for everyone getting a percentage of your policy settlement.

One of the best resources for finding a Settlement association is to check with your local hospice. They daily live with those who are critical ill and are often able to get you in contact with those who can broker a viatical settlement. If hospice can not help then there is a non profit association named the Viatical and Life Settlement Association of America who can get you in touch with a broker who can help. The AARP also has a great article on Viatical Frauds. The AARP is a partisan organization, so make sure you consider wisely before partnering with them for any other service.