A viatical settlement occurs when a person with a terminal or chronic illness sells his or her life insurance policy to a third party for cash payment. The Viatical Settlement provider is the person or company that buys the life insurance policy. The Viatical Settlement provider becomes the new owner and/or beneficiary of the life insurance policy, pays all future premiums, and collects the death benefit of the policy when the insured dies.
A Viatical Settlement purchase agreement is the contract or agreement in which the Viatical Settlement buyer agrees to buy all or part of the a life insurance policy. Viatical Settlements should be arranged by an experienced Viatical Settlement Broker who will draft the Viatical Settlement purchase agreement. Viatical Settlement Brokers are paid commission on the brokered policy value.
A Viatical Settlement is a complex financial arrangement which may require professional guidance. You may want to consult a Viatical Settlement company or an attorney before entering into it.