The viator in a viatical settlement is the policyholder who sells their life insurance policy to a third party. This individual is often terminally ill or has a serious medical condition.
The viator's primary motivation for entering into a viatical settlement is to receive a lump sum payment, which can help cover medical expenses or other financial needs.
This payment is typically a fraction of the policy's face value, and the viator receives it in exchange for surrendering their policy rights to the buyer, known as the investor.
You might like: What If My Medical Bills Are More than My Settlement
What is a Viatical Settlement?
A viatical settlement is a transaction where a person, known as a viator, sells their life insurance policy to an outside party. This transaction is also known as a viatical settlement.
The viator receives a percentage of the policy's death benefit while still alive.
The proceeds from a viatical settlement are tax-free.
A viator gives up life insurance protection after selling the policy. Their heirs will no longer receive a death benefit payout.
Explore further: Insurance Claim Settlement
Key Players in a Viatical Settlement
A viator is a person who sells their life insurance policy to an outside party, receiving a percentage of the policy's death benefit in return.
The viator is typically someone with a terminal or life-threatening illness, but some states allow viators who are not seriously ill to sell their policies within specific guidelines.
The viator gives up life insurance protection after selling the policy, meaning their heirs will no longer receive a death benefit payout.
The proceeds from a viatical settlement are tax-free, which can be a significant advantage for the viator.
In jurisdictions that define a viator as someone with a terminal or life-threatening illness, the viator's condition often determines the terms of the sale.
Suggestion: Wrongful Death Settlements Paid
Understanding the Process
A viator is a person who sells their life insurance policy to an outside party, receiving a percentage of the policy's death benefit while still alive.
The proceeds from this transaction, known as a viatical settlement, are tax-free.
The viator gives up life insurance protection after selling the policy, meaning their heirs will no longer receive a death benefit payout.
Many jurisdictions define a viator as a person with a terminal or life-threatening illness.
Some states allow viators who are not seriously ill to sell their policies within specific guidelines.
Featured Images: pexels.com
