Viatical Settlements

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

Tim is a licensed life insurance agent with 23 years of experience helping people protect their families and businesses with term life insurance. He writes and creates stuff for QuickQuote and other insurance and financial websites. You can find him on Twitter.

Full Bio →

Written by

UPDATED: Feb 25, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right life insurance coverage choices.

Advertiser Disclosure: We strive to help you make confident life insurance decisions. Comparison shopping should be easy. We partner with top life insurance providers. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance-related. We update our site regularly, and all content is reviewed by life insurance experts.

We are often asked about viatical settlements here at QuickQuote. This is a rapidly growing business that is related to the life insurance industry. I say ‘related’ because viatical settlements are not life insurance products; however, they do have a significant impact on the life insurance industry.

Viatical companies make money by purchasing life insurance policies from people with serious or even terminal illness, or from the elderly. The company typically pays the policy owner a price that is higher than the surrender value of the policy but lower than the death benefit. With this arrangement, a terminally ill or elderly policy owner can make more money by selling to a viatical company than they would be cashing in their policy. Also, the viatical company makes a profit because they receive the death benefit when the insured dies; an amount that is higher than they paid for the policy.

The viatical company must also pay the premiums on the policy until the insured dies. Therefore, they will be more interested in purchasing policies on the lives of individuals with short life expectancies.

Policy owners need to consider that while viatical settlements can provide much-needed cash, the money they receive from the sale is likely to be considered taxable, while most death benefit payments are not. Also, many insurance companies will advance a portion of the death benefit proceeds to a policy owner if the insured is diagnosed as terminally ill. This is typically done through a policy’s accelerated death benefits feature.

Ready to compare quick life insurance quotes?

Your life insurance quotes are always free.

 Secured with SHA-256 Encryption

QuickQuote is a BBB Accredited Business. QuickQuote Financial, Inc. BBB Business Review