Viatical Settlement
Act by a person who is terminally ill of cashing in a life insurance policy to pay for the necessary associated illness, medical expenses, and final wishes. This terminally ill person contacts a viatical agent who bids the life insurance policy on the terminally ill person to the many viatical settlement companies. The package that is sent out for bids includes the terms of the life insurance policy as well as the medical prognosis of the terminally ill person. The viatical settlement company that is awarded the bid agrees to pay 50% to 80% of the FACE AMOUNT of the policy, varying according to the gravity of the terminally ill person's condition and LIFE EXPECTANCY. In turn, the viatical settlement company sells the terminally ill person's life insurance policy to an investor who then becomes the POLICYHOLDER as well as the BENEFICIARY and assumes payment of the premiums of the policy. Upon the death of the terminally ill person, the investor will receive 100% of the life insurance policy's face amount from the insurance company. The sooner the terminally ill patient dies, the higher the investor's return. While returns of 15% to 20% are typical for investors, the policies can pay off a substantially higher return if death occurs early.
Popular Insurance Terms
Technique designed to permit the exchange of a life insurance policy that has an outstanding loan charged against it for another life insurance policy on a tax-free basis. The procedure is ...
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Incidents covered under workers compensation benefit. ...
Insurance company whose premium rates are usually below that of other insurance companies and the rating bureau. ...
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