If you’re looking to cash in on your life insurance policy early, viatical settlements are a great option to consider. Viatical settlements can give you a lump sum cash payout on your life insurance policy so that you can use it as an extra source of income if you’re dealing with a terminal illness or mounting medical costs as you near the end of your life. That money can help reduce some of the emotional and mental strain of facing such a problem by alleviating the financial burden that comes with such a stressful diagnosis.
In these sorts of situations, it almost feels cruel for you to be unable to access the money from your life insurance policy on its own terms and conditions. After all, by the time someone passes away from a chronic illness, medical debt may have already been racked up. Rather than having to pay interest on such debts by putting it on your credit card, it makes much more sense to access some of your life insurance money ahead of time to cover your medical bills. Also, once you sell your life insurance policy to a viatical settlement provider, they will be responsible for any future premiums that are owed to the life insurance company, which lowers the initial policyholder’s monthly expenses.
However, not everyone can qualify for a viatical settlement, as there are certain criteria you need to meet in order to receive one. Here are the things you need to know about who does and doesn’t qualify for a lump sum payout from their life insurance policy.
What qualifications do you need for a viatical settlement?
In order to get a viatical settlement from your policy, your life insurance policy needs to meet a few prerequisites first. For example, your life insurance policy needs to be more than two years old in order for you to be able to get a payout from a viatical settlement company. In addition to meeting the time requirements, the face value of the policy must be at least $200,000. Keep in mind that you won’t get full value for your life insurance policy, so the higher its policy value is the better. That way you know you’ll be getting a good lump sum for the overall cash value of your premium and death benefit.
What illnesses can qualify you for viatical settlement payouts?
One of the other criteria that must be met in order to qualify for a viatical settlement involves having a chronic illness or a terminal illness. For example, if you have certain types of cancer or spine conditions that affect your spinal canal or threaten your life, you may be eligible to receive a viatical settlement. Many times, a policyholder will need to provide medical documentation from their doctor or medical provider, such as a neurosurgeon, that offers more information about your condition as well as your overall prognosis.
Generally speaking, this means that you’re a patient with a short life expectancy. This is because brokers want to be sure that the money is going to be spent on appropriate medical expenses instead of being frivolously spent on other things. A viatical settlement is meant to aid with the last few years of someone’s life while they’re facing the uncertainty of a diagnosis and a short life expectancy.
As you can see, not everyone may qualify for a life settlement from a viatical settlement company. If you want to learn more about whether or not you qualify for a viatical settlement, it can be worth reaching out to a life settlement broker. Viatical settlement companies generally have forms you can fill out online in order to figure out whether or not you qualify. After you submit a simple form, you’ll likely get a phone call or email from a broker or advisor to learn more about your life insurance policy and how much of a payout you may qualify for.