How to Prepare for a Viatical Settlement

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Viatical settlements are rapidly increasing as the go-to insurance policy for people across the United States who have been given the sad news that their illness is terminal. Whilst a lot of Americans have life insurance policies for the possibility of an untimely passing, by their definition, these insurances will never be seen or used by them during their lifetimes. With the also-increasing popularity of pre-paid funerals and cremations, the payouts (or “death benefits”) of life insurance policies are these days to do little more than provide a little extra financial comfort to surviving family members. However, the time when they could have really made a difference has passed.

What are viatical settlements?


Before looking at how these policies help, it would be useful to know what they are. Viatical Settlements are essentially transactions whereby a terminally ill policyholder sells their life insurance policy to a third-party investor (who becomes known as a “beneficiary”) for a lump sum of cash upfront. This transaction will not be worth as much as the life insurance’s death benefit would have been if used postmortem. Still, it is readily available to the original policyholder to spend as they see fit (more on this later). The beneficiary then takes over the continuing payments of the life insurance premiums until the point of the original policyholder’s passing. At this point, they can receive the full payout. This means it is financially beneficial to all parties involved and that a viatical settlement can be a good investment for the third party.

A further proviso is that the policyholder who is surrendering their life insurance is doing so to understand that their life expectancy has shortened. That is to say that their passing is expected to be within two years, as there have been instances where medical breakthroughs have nullified the vacating of life insurance policies.

How do I sell my life insurance policy?

In many ways, a more apt question would be who buys life insurance policies. Third-party beneficiaries don’t tend to be investors looking for a quick buck, but either people closest to you who you know stand to benefit from your insurance more or insurance brokers like the American Life Fund.

American Life fund viatical settlement brokers are industry-leading and offer a swift and simple service to those who apply for a lump sum payout. Their focus is primarily on viatical settlements and end of life care, and their website gives a tremendous amount of information about how these policies benefit the seller. For example, a viatical settlement, except for the original surrender value, is tax-free. Also, once it has been surrendered, there are no lasting debts from your life insurance policy.

If you are thinking about vacating your life insurance policy in exchange for a lump sum but aren’t sure how to go about it, you should consider starting with the American Life Fund and organizing a free consultation with them first.

Why would I sell my life insurance policy?


The pre-requisites for selling your policy in a viatical settlement is that you are chronically or terminally ill and don’t have a great deal of time left on this earth. But what you do with your lump sum of cash is entirely up to you. It’s recommended that you use the money for end-of-life care, but not all illnesses require such in the final days. If you haven’t already, then you can use the cash (which is up to 70% of the life insurance’s payout in most cases) to plan and pay for a funeral or to pay off a mortgage to let your loved ones live there without debt.

Beyond that, however, the world is truly your oyster, even if time is not as long as you would want it to be. Maybe spend some time on the coast in the sunshine state–and if you like it so much, then pack up and move down there. Forget about your belongings and put them into storage units in Fort Lauderdale while you are sunning it on one of Miami’s beaches. The warm climate comes at a cost, but it seems a little more possible with a viatical settlement. Regardless of whether you move there or holiday there, you should check out US Self Storage for a few safe and secure facilities to put your belongings until a time that you really need them.

What if I can’t travel?

Again, it really doesn’t matter to anyone else what you do with your payout. You can go traveling with it or stay at home and enjoy time with your family on the important days you have left, and no one would, or should, make a difference. However, if you have come here looking for a few ideas, then one would be to spend it on loved ones. You can’t take it with you, and no amount of cash in the universe can replace you, so spend it anyway. But that son or grandson that car they always had their eye on, so that they have something that will remind them of you every day. Or splurge on some retail therapy with the women in your life. If you want to make this Christmas extra special, White House Black Market has a sale on their range of women’s attire, including petite blouses and dresses.

Again, the material is not intended to be a replacement for you, but studies show that if you look good, you tend to feel good too.


A final bonus idea involves investing your money or spending it on a business idea you’ve always had but never felt the time was right for. This could be something that you leave behind for your loved ones to take over or just a passion project that you really believe in. Finding an entrepreneur in this can be a big help (after all, Courtney Sarofim worked wonders for Adam Lippes when he needed help setting up a clothing line).

Whichever way you choose to spend the money from your viatical settlement, please do so in the knowledge that it is yours to spend how you wish.

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