Your Guide to Viatical Settlements and How to Use Them

The network of viatical settlement providers and the insurance industry as a whole are some of the least understood and yet most important options for viators—individuals carrying life insurance coverage that’s no longer needed. Simply put, a viatical settlement is the sale of the death benefit on your life insurance policy to a third party buyer, a transaction that’s often managed by a professional broker. The third party buyer continues to pay the premiums, relieving you of this requirement, and you get a lump sum cash payout in return. This payout often totals about 50% – 60% of the face value or death benefit that the beneficiaries would receive if the policyholder had maintained the life insurance policy yourself and continued to carry on paying the premiums every month.

Many seniors and others with life insurance coverage stumble upon the option of viatical settlements and think the offer is too good to be true, yet this financial tradeoff is something that many people successfully take advantage of every year in the United States to bolster their savings goals and savings accounts. Leveraging a viatical or life settlement payout to reduce debt, take a vacation, or cover medical expenses can give you access to the financial freedom that you deserve after decades of adding to your savings account and a dedication to hard work.

A viatical settlement isn’t for everyone with a suddenly shortened life expectancy, but it’s in your best interest to explore you options here. Continue reading to understand exactly how the viatical settlement process and viatical settlement contracts work, as well as the most effective use cases for this life insurance policy and savings goal augmentation option.

A viatical settlement is a trade on your life insurance policy.


First and foremost, a viatical settlement is essentially a trade of benefits with a third party company (a viatical settlement broker) for a viator whose life expectancy has been cut short by a terminal illness or another life threatening factor. Viatical settlement providers, financial institutions, and brokers offer a range of options to insured individuals who want to leverage their life insurance policy and the death benefit owed to their beneficiaries in order to help transform their present financial picture. Insurance coverage requires monthly premiums to keep the policy current, much like healthcare, homeowner’s, or auto insurance coverage premiums. Many policyholders find that keeping up with these monthly payments becomes too much of a burden and consider dropping the coverage altogether, which results in the loss of the death benefit.

Rather than simply letting go of the coverage that you’ve paid into for years or even decades, a viatical settlement allows you to reap a significant financial reward. Many homeowners fall back on savings goal calculator or financial planner apps to track their expenses and savings goals when it comes to a new home purchase, vacation, or splurge purchase on something that will make them happy over the long run. A calculator is the perfect tool for tracking your financial goals, used it in conjunction with the assistance of a financial advisor it means that you’re likely to always stay ahead of your finances and retain as much money as you need for continued quality of life.

A viatical settlement is a great way for older adults to bring a windfall of cash into the fold to help cover the costs of these purchases. Trading the death benefit for an immediate payout can bring you much closer to a savings goal than you may have thought possible, and the truth is that these financial products are waiting for you to capitalize on them. While strictly speaking, a death benefit payout doesn’t “benefit” you personally, it is an important financial resource that helps your family defray the costs of medical expenses, a remaining mortgage bill, and any other large debts that you may be carrying. If these aren’t a factor in your financial picture, then the payout from your life insurance policy exists solely as an inheritance booster for whomever you choose to include as a beneficiary.

Signing over these beneficiary rights to a third party viatical settlement company gives you the ability to tap into this cash payout today rather than waiting to pass it on later. This can be a great way to enrich your life in your older years or to eliminate remaining debts and make the inheritance process smoother.

Quality of life and medical expenses are a common viatical settlement target.


Insured adults often utilize the payout leverage of a viatical settlement to square away medical expenses while they are still living. While life settlements can be invoked by anyone, a viatical settlement is reserved for those with terminal diagnoses or in the elderly stages of life. This means that a viatical settlement is often leveraged as a last burst of cash for settling outstanding medical expenses or living expenses, which can balloon in the final years of life for the average American who finds themselves in the role of an ill patient and a spouse or children to think about.

Instead of relying on a meager social security check or solely on the savings you’ve been able to put away through a lifetime of work, a viatical settlement can boost your free capital by a substantial amount, making your final years some of your freest when it comes to the squeeze that seniors often see in their finances.

Those needing continuous medical attention benefit from this infusion perhaps more than most. The ongoing expense of medical treatment can really add up as you age. A Baltimore teletherapy provider can reduce the risk of Covid-19 exposure and the overall cost that is typically far greater with in-person visits, but the expenses are still a major concern for many insurance policyholders in their golden years. For those with a terminal illness or new, distressing diagnoses, a teletherapy solution is a great way to work through individual and marital therapy or to address mood or eating disorders that have recently presented themselves in your life.

A viatical settlement is great for home improvements, moves, or a lifestyle of vacation days.


Viaticals are also great for those looking to move or improve upon their home’s value. Pouring this infusion of cash straight into your home is a great way to make your money work for you. You’ve been paying into this fund as a hedge for many years, and the payout can be used in any way you see fit. Targeting value-added improvements like an extension or kitchen renovation can breathe new life into your living space while making your estate grow in value as well.

Many see this cash as a great opportunity to invest in new opportunities that will enrich their remaining years and their beneficiaries. With a renovation or the purchase of one of many small log cabins for sale in North Carolina in order to add to your portfolio of real estate holdings, you can do just that. Log cabins offer a unique getaway for you and your loved ones that can really boost your quality of life. As well, these log cabin properties are a great inheritance tool as you think about estate planning for the future. Your children or spouse can take in a yearly vacation in this log home property and remember you fondly for years to come.

Viatical settlement options are a core component of the healthcare and insurance components of personal finance. Still, many people simply don’t understand all the benefits that these options provide to aging Americans. As you prepare for the next phase of your life, make sure you are taking advantage of every opportunity you get. One of them may just be a cash infusion through the viatical process.