The Pros and Cons of Viatical Settlements
A viatical settlement is an arrangement that allows people to buy or to invest in someone’s life insurance policy.
When the policy owner dies, the buyer receives the full amount of that policy. The most frequent reasons for selling a life policy are medical bills or covering other expenses alongside medical treatment.
Here are some of the benefits and drawbacks of this arrangement, according to a Dallas financial planner.
The Pros Viatical Settlement
Perhaps the main advantage of this type of settlement is that it represents a rapid source of money, especially for terminally-ill patients. The only document you will need to complete this transaction is a life insurance policy. After you’ve found a buyer and agreed on the price, he or she will make the payment immediately.
Selling your life insurance policy is risk and tax-free. The buyer will continue to pay the taxes until the person dies. When the inevitable happens, the buyer collects the money. However, keep in mind that age is a critical matter in this case. If the person is older than 65, the price of selling is higher.
The Cons of Viatical Settlements
Most policy owners look for viatical settlement when they face a terminal disease. An important fact for those purchasing the policy is that the return depends on the seller’s life expectancy but also on the actual date of death.
If the seller lives longer than estimated, your costs as a buyer will increase, and the final amount of money you receive will decrease.
Also, the purchaser is responsible for contributing to the life insurance policy, with premium taxes, until the passing of the insured. A Dallas financial planner can always help you figure out the details about fees and other conditions.
Exemplify Financial offers help for those terminally ill that are in need for ready cash, or for those wanting to buy a life insurance policy.