A viatical settlement is the sale of a life insurance policy by someone with a terminal illness or a significantly reduced life expectancy. The seller receives a lump sum payment, and the buyer assumes responsibility for paying future premiums and collecting the death benefit upon the insured’s passing.

Typically, individuals diagnosed with a terminal illness and a life expectancy of less than two years are eligible. Age is not a primary factor; health is the main consideration.

Viatical settlements provide immediate financial relief, often used to cover medical bills, caregiving expenses, or other urgent needs.

The payout depends on several factors, including:

• The insured’s life expectancy.
• The policy’s face value.
• Premium costs.
• Buyer demand in the viatical settlement market.

Some states mandate minimum payout percentages based on the insured’s life expectancy. For example:

• Less than 6 months: 80% of the face value.
• 6–12 months: 70%.
• 12–24 months: 60%.

Yes, viatical settlements are regulated in most states to protect consumers. Regulations often include licensing requirements, mandatory disclosures, and rescission periods.

The process usually takes 2–6 weeks, depending on how quickly documentation is collected and processed.

Many states offer a viatical settlement rescission period, typically 15–30 days, during which you can cancel the settlement, return the funds, and retain your policy.

Buyers are typically institutional investors or specialized settlement funds. These buyers view viatical settlements as stable investments.

Yes, some buyers allow partial settlements, enabling you to retain a portion of the death benefit while accessing immediate funds.

The sale is final, even if your health improves the funds are yours. 

Work with a licensed expert like LS Hub with access to a global network of buyers to ensure a competitive payout. Avoid companies that lack transparency or are direct buyers.

Overshopping (submitting your policy to too many buyers) can deter some top funds from engaging, as they may see the policy as overexposed. This can lower your final offers.

LS Hub is a technology enabled broker, with  an industry low fee structure, who can effectively engage all buyers from a central source. This brings more end-funds to the table which can mean higher offers. 

• Working with direct buyers that eliminate competition, which can result in lower offers.
• Professionals who are inexperienced in settlements or prioritize commissions over your best interests.