The physical and emotional demands of a terminal illness are traumatic enough - both for the person and for the near and dear ones. Financial strains only serve to compound the trauma. Viatical life insurance settlements, if handled carefully, can provide financial relief. The process of viatical settlement involves the selling of a life insurance policy by a terminally ill person whose life expectancy has been predicted for about two years or so, to unrelated investors - which can be banks, private companies, or brokers.
This gamble on death may seem unpalatable to many but can provide help to people by easing their financial strains and providing the cash to get better health and medical care.
The seller of the policy gets cash surrender value while surrendering the policy. The surrender value is less than the face value of the policy. But the seller needs to keep in mind that the value he gets for selling the policy should be more than what he would other wise get by surrendering his policy.
While selling one's life insurance policy, he or she should keep in mind that there may be accelerated benefits associated with the policy. These benefits are also sometimes called living benefits. These are benefits that a policyholder gets from the insurer before he dies.
Any decisions involving the sale of life insurance policy will have a deep emotional impact on the seller and his family members. So before coming to any decision it makes sense to talk to a lawyer or a financial planner.
The other alternative is to contact the state Insurance Commissioner or the insurance company's claims department so as to explore the maximum alternatives. The insurance companies can sometimes offer accelerated benefits or even loans. Accelerated benefits are usually added to the policies for additional premiums, while there are companies who do not charge any additional premiums.