Individuals often allow payment towards policies to lapse and lose amounts due to them even after money has been paid to insurance companies over the years. One of the choices that a customer has, is to cash in the policy and get cash surrender value, that is the amount which has been previously paid over and above the interest. Second choice may be to sell the policy to a bank or some other financial institution. These buyers provide cash settlements that exceed cash surrender value of policy. This cash payment is termed as a life settlement.
Generally amounts earned through life insurance settlement are much higher than the surrender value of the policy. More people are becoming aware about life insurance settlements. Brokers who bid and deal for various life insurance settlements are popularizing such a trend. Companies that are into buying life insurance settlements basically look for a policy that belongs to senior citizens above the age of 65. Such policies fetch a good value in the market, but this is valid only for individuals who may be keeping good health.
Treatment for illness could be expensive and a financial drain to a person. Viatical settlements provide financial support to families and provide comfort at an emotional level too in case of serious diseases. Such settlements allow individuals to use present day values of their policies and cash them to reduce financial pressure. These settlements are legally recognized and value obtained for such claims are equal to their face values. There are various limitations involved with Viaticals sales as method of settlement depends on the state involved. Therefore, anyone considering a Viatical settlement should consult legal professionals.
Also before finalizing a Viatical settlement, policyholders can reconfirm various deals offered by insurance companies to check who offers the best deal. Some policies offer cash value apart from death benefit and accelerated death benefits that can offer access to cash. If no feasible options are available, Viatical settlements may be an ideal option for terminally ill individuals and their families.