Viatical Settlements Explained: 5 Tips for Investors

You don’t hear many people talking about viatical settlements. While it’s an unpopular investment opportunity, it’s quite an interesting one. A viatical settlement is a sale of a policyholder’s life insurance to a third party. It’s great for people who want to cash out early because of a terminal or chronic illness. But how can you make it a viable investment opportunity? Let’s take a look at five valuable investment tips.

  1. Research other alternatives first

As there is various criteria to meet with a viatical settlement, it’s not a suitable investment for everyone. For example, the seller’s policy must have a face value of about $200,000. The seller also has to be chronically ill or have a short life expectancy, with an insurance policy that’s more than two years old. More so, even if you meet the above requirements, a viatical settlement investment should be last on your list. Although the investment offers lump-sum payments, it’s more beneficial for chronically ill people who need treatment.

Beyond viatical settlements, there are many more lucrative (and better) alternative investments. For example, alternative investment platforms like Yieldstreet provide real estate, litigation finance, marine finance, and equal opportunities for art dealers. Yieldstreet’s investment platform offers high-yield products and short and medium-range investments. This is excellent for people who still want to leave their insurance benefits for a family member or two. For more information, check out this Yieldstreet review.

2. Find a reliable settlement company

Realizing you have a serious illness like cancer can be extremely difficult and heartbreaking. At some point, you have to start thinking of the various options you have to either fund the treatment or try to make the best of the time you have to live. If you or a family member require some extra cash for cancer treatment, a viatical settlement is a good option. It especially works well if your family members don’t need the extra money.

However, before selling your policy, it’s essential to find a reputable company like to assist with the viatical settlement process. They are specialists in the field and have many years of experience working with people diagnosed with late-stage cancer and other life-threatening illnesses.

As long as you can prove that you have a chronic illness or an existing insurance policy, the rest is easy. They’ll ensure you receive the highest possible offer for your policy, with a quick turnaround. As the policy seller, you’ll receive a higher lump sum than the cash surrender value but lower than the death benefits. If you qualify, apply once the offer is reviewed and accepted. In less than a week, you could receive a lump sum payout from American Life Fund.

3. Let your family members know

Perhaps, you’ve thought about investing in the stock market or real estate, but you decided that the fast cash out opportunities from viatical settlements are better for your situation. Before you cash out your settlement, it’s best to let your family know. If you’re going to cover medical bills and other responsibilities, they should know about it, mainly if they were depending on the death benefits.

4. Figure out what you’ll do with the money

Financial freedom is excellent, especially when you know your insurance policy management is in good hands. After selling to an accredited investor like American Life Fund, the downside is you may not enjoy the usual Medicaid or Medicare benefits. Depending on your health status, it’s best to look for reasonable ways to spend such a lump sum of money. Either reinvest on a tangible asset that’ll bring in short term returns, pay for your treatment, or decide on a retirement plan.

5. Check the transaction costs

Different viatical settlement companies have their individual transaction costs. This is why it’s better to check the life settlement regulations and transactions in your state and the company. When there’s no upfront third party, you may need to pay commissions to the middlemen facilitating the process. Remember, some companies have hidden transaction costs, so don’t hurry to sell without knowing all the details.