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Viatical Settlement

What is a Viatical Settlement?

In 1911, the United States Supreme Court ruled that life insurance is personal property. Similar to a mortgage payment, with each premium payment you pay towards your life insurance policy you build equity. What this means is, just like your house, you have the option to sell your life insurance policy.

The definition of Viatical Settlement is the sale of a life insurance policy for an amount that is more than the cash surrender value but less than the claim amount. On average, we provide clients with 6-8x more money than the cash surrender value. This means that you can receive up to 8x more for your policy by choosing to sell rather than surrender.


of Americans are aware that their policy has a market value


BILLION is forfeited back to life insurance companies each year in the U.S.


of seniors state they would have considered a life insurance settlement option if they knew it existed


MILLION Americans will be of retirement age by 2020

For many individuals facing a terminal illness, a viatical sale can be a strong financial solution. Patients and their families can receive funds to pay for medical care or quality of life experiences. We commonly see clients use their funds to tackle their “bucket-lists.” Many insured want to be able to see their family enjoy their life insurance money now, rather than not being present to share in their happiness.

Coping with a medical crisis while still worrying about medical bills works against the goals of palliative care and hospice. With the cost of healthcare continuing to rise, even those with excellent health insurance are struggling to keep up with medical expenses. Viatical settlements can provide an inflow of funds which can be used to pay off bills or fund experimental/alternative treatments that may not be covered under insurance.

How Is This Option Different Than Normal Life Insurance Purchases?

Selling your life insurance policy to pay for medical needs is specifically for individuals suffering from a terminal illness. The transaction can typically be done tax-free, so long as the insured meets certain criteria as stated by a medical professional. At its core, it is essentially the same as other life settlement options; with the major caveat being the insured is typically suffering from a terminal illness and has a life expectancy of less than two years.


  • The insured is terminally/chronically ill.
  • The proceeds typically range from 50% to 80% of the death benefit.
  • The IRS allows proceeds to be received as a tax-free gain so long as the insured meets certain criteria as stated by a medical professional


  • The insured is typically a senior in their late 70s.
  • The proceeds are usually around 10% to 80% of the death benefit, depending on life expectancy.
  • The funds are normally subject to taxation unless they meet IRS guidelines.