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
Several insurance companies under common ownership and, often, common management. ...
Describing a risk whose probability of loss is less than the norm or the standard expectation of loss for that underwriting classification. ...
Exceptions to coverage. There is no obligation for an insurance company to pay a claim if: the loss is not covered by a policy, or a particular person is not included in the definition of ...
Health insurance that provides coverage for physicians' fees for all services, with the exception of surgeons' fees. ...
Coverage for equipment normally carried from location to location by a physician or surgeon; written on an all risks basis to include supplies and scientific books used in medical practice. ...
Attachment to an insurance policy to complete its coverage. For example, the Standard Fire Policy must have certain forms attached for it to provide the coverage desired. ...
Section of some inland marine insurance {transportation insurance) and many other property insurance policies excluding coverage for damage to shipped goods by vermin such as rats. ...
Policy provision designed to restore an insured to his or her original financial position after a loss. The insured should neither profit nor be put at a monetary disadvantage by incurring ...
Use of a home, and the land and buildings surrounding that home, free from the claim of creditors. This right gives rise to an insurable interest. ...
Have a question or comment?
We're here to help.