VIATICAL SETTLEMENTS

A viatical settlement is, simply, cash paid to a terminally or chronically ill person in exchange for his or her life insurance policy's death benefits. The seller transfers all policy ownership rights and obligations to the buyer in exchange for a percentage of the policy's face value.

In short, a life insurance policy is an asset that the insured has the right to sell. It is important to note, however, that once a life insurance policy is sold, the original beneficiaries will not be entitled to any proceeds upon the insured's demise. If this is a concern, a partial sale of the policy should be explored. 

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