Life Settlement vs. Viatical Settlement

What is the Difference Between a Viatical and Life Settlement?

The best way to think about a Viatical Settlement isĀ the sale of an existing life insurance policy. This trade is also sometimes referred to as a Life Settlement. Generally, the distinction between a life settlement vs. a viatical settlement has to do with the health status of the insured and how that potentially may impact the tax treatmentĀ of the income from the sale.

If the insured is terminally ill, the sale is generally referred to as a viatical. On the other hand, insureds with longer life expectancies typically sell through a Life Settlement. However, some states have created legal definitions that differ slightly.

Settlement Benefits is Here to Help

As long as you deploy a professional broker, donā€™t be concerned with the difference between a life settlement vs. a viatical settlement.Ā Professionals likeĀ Settlement Benefits AssociationĀ can handle the legal aspects of the sale to ensure that you maximize the value of your policy and comply with all applicable state rules. This compliance ensures you will have all of the consumer protection created by each stateā€™s department of insurance.

To learn more about your life insurance options, contact us today.

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Frequently Asked Questions (FAQs)

Overall, the primary difference between Life Settlements and Viatical Settlements is the health of the underlying insured. Viatical Settlements are policy sales where the insured has a life expectancy of fewer than four years due to a terminal illness. Our online guide about the nuances between the two offers more details.

Finding the right partner to help you navigate the process starts with choosing a reputable broker with extensive industry experience and expertise. Settlement Benefits Association is a distinguished member of LISA, the Life Insurance Settlement Association. We are one of the only brokers approved by the organization and abide by strict ethics, standards, and privacy guidelines to maintain our status.Ā 

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