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
Cost per unit of insurance. ...
Waiver of an impairment of an applicant for health insurance by attaching an endorsement to the health insurance policy stating that the policy will pay no benefits in connection with the ...
Provision that the equity of an insured in a life insurance policy cannot be forfeited. There are four benefits a policyholder can select under the option: cash surrender value, extended ...
Same as term Buy-Back Deductible: deductible eliminated through the payment of an additional premium, resulting in first-dollar coverage under the policy. ...
Special policy blank issued by an insured for individual shipments or other purposes under an open policy. The open policy allows an insured to buy protection for all marine business for an ...
services provided in an employee benefit plan such as a pension plan. An employer provides the clerical staff to operate the plan, in effect acting as custodian. The trustee provides ...
Insurance for private pleasure boats. Coverage is not standard, but is generally broken down into insurance for yachts, including sailboats; boats with inboard motors under marine ...
Case where an insurance company is placed by the state court under the control of the state insurance department. Claims are paid in the order filed until the insurance company's ability to ...
Coverage for an insured manufacturer for claims after a manufactured product has been sold and/or a claim results from an operation which the manufacturer has completed. ...
Have a question or comment?
We're here to help.