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What is a Viatical Settlement?

Viatical settlements allow someone diagnosed with a life-threatening illness to sell their life insurance policy for cash. This person is known as the “viator.”

The third party they sell their policy to is an institutional investor, usually a viatical settlement company such as us here at American Life Fund.

A viatical settlement is a legally enforceable agreement between a life insurance policyholder with a severe illness (viator) and a viatical settlement business.

How Does a Viatical Settlement in New York Work?

The process begins when the policyholder contacts a viatical settlement company like American Life Fund. After an initial consultation, the viator will apply.

Once the application is received, our underwriters will evaluate the case and verify all information provided by the viator.

If the case is approved, the viator will be asked to sign contracts issuing the viatical company as the new policy owner and beneficiary in exchange for the agreed-upon offer amount. Then we will issue a payment for the offer amount. It’s that simple! The entire process can take as little as two weeks from start to finish.

Viatical Settlement in Texas

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Who Is Eligible For A Viatical Settlement in New York?

Insured’s Health

To qualify for a viatical settlement, the insured must be diagnosed with a life-threatening illness such as cancer or ALS.

Policy Type

All life insurance policy types are accepted. Whether you have whole life, term life, universal, group, or joint life insurance, you could be eligible for a viatical settlement. However, if the policy is issued through an employer, the insured must be separated from the employer or nearing separation from their employer in order to sell their policy.

The Age Of The Life Insurance Policy

The life insurance policy must have been in place for at least two years.

The Value Of The Life Insurance Policy

The life insurance policy must have a death benefit of at least $150,000.

What are the Benefits of a Viatical Settlement in New York?

There are many benefits of entering into a viatical settlement. However, the two most common reasons people do it are for the money and to ease the burden on their loved ones.

Some other benefits include:

  • No medical exams are required
  • You can use the money however you want
  • It’s a speedy process
  • You can choose the settlement company you want to work with

American Life Fund is one of the leading viatical settlement companies serving the citizens of the USA. We have helped many people through this difficult time in their lives.

Viatical Settlement in Texas

How are Viatical Settlement Payments Calculated?

Viatical Settlement in Texas

The payout you receive from a viatical settlement is based on several factors, including but not limited to:

  • The death benefit of your life insurance policy
  • Your health condition
  • The type of life insurance policy you have

These are just a few of the factors that will affect your payout. For an accurate and free quote, call us at 877-590-4088, and one of our expert representatives will be more than happy to help you.

The Pros And Cons Of A Viatical Settlement

Not sure if a viatical settlement is a right move for you or your loved one? Here are some things to keep in mind.

Pros:

  1. You’ll get a one-time payout much higher than the cash surrender value through a viatical.
  2. Help pay for medical expenses such as medical premiums, treatment, or long-term care.
  3. Use your money for better care, travel, or anything else to make you happier.
  4. With a viatical settlement, you can stop making premium payments. The new owner i.e. the viatical settlement company, will take over those responsibilities. They will also be in charge of any other maintenance costs.

Cons:

  1. Government assistance programs such as Medicaid are need-based programs based on your income and assets, so you may lose eligibility if your finances improve.
  2. Beneficiaries won’t be able to receive the death benefit from your life insurance policy  unless you choose to give them part of your viatical settlement payout.

Viatical Settlement Examples

Here are a few examples of how people have used their viatical settlement payouts:

  • John had a life insurance policy with a $500,000 death benefit. He was diagnosed with terminal cancer and decided to enter a viatical settlement. He received a payout of $300,000 and used the money to travel and spend time with his family members.
  • Mary had a life insurance policy with a $250,000 death benefit. She received $150,000 and used the money to pay for her medical expenses and treatments.
  • Mike had a life insurance policy with a $150,000 death benefit. He received $90,000 and used the money to pay off his debts.

As you can see, viatical settlements can be very beneficial for seriously ill people who need financial assistance.

Viatical Settlement vs Life Settlement

When looking into viaticals, you may hear the term “viatical life settlement” thrown around — but viatical settlements and life settlements are two separate transactions. A life settlement is similar to a viatical settlement, but the two have several key differences.

How do life settlements work?

  • A life settlement is a transaction that occurs when an individual over 75 sells a life insurance policy to a settlement provider for cash, usually yielding considerably more than the policy’s surrender value.
  • The size of a life settlement payout is mostly determined by the policyholder’s health status and the premium payments of the policy. The money from selling life insurance policies can be used to finance long-term care, medical procedures, travel, or family events.
  • Many people are unaware they can sell their life insurance policy for cash. When a policy becomes too expensive or unnecessary, the owner typically lets it lapse without knowing there is another option—the life settlement market.
Viatical Settlement in Texas

Alternatives To Viatical Settlements

Not sure if a viatical settlement is right for you? Here are some other options to consider

Withdrawals

You can withdraw from the cash value of your life insurance policy, but this will reduce the death benefit paid to your beneficiaries.

Surrendering the policy

You can cancel your life insurance policy and receive the cash surrender value. This is usually a bad idea because you will get less money than if you had sold the policy in a viatical settlement.

Although viatical settlements offer many benefits, they aren’t the only form of financial assistance available. Be sure to speak with a professional before making any decisions.

Is a Viatical Settlement Right For You?

With life insurance policies increasing daily, it’s important to consider all options before deciding. For those with a chronic or terminal illness – selling your policies may be one way to afford quality care while still securing a financial cushion that will help you improve your quality of life.

If you or a loved one is facing a life-threatening illness and needs a Viatical Settlement, please call us at 877-297-4592 to see how we can help.

FAQ about Viatical Settlement in New York

The process in New York involves selling your life insurance policy to a third party for a cash amount less than the death benefit but more than the cash surrender value. Initially, you would contact a viatical settlement company like American Life Fund, which specializes in these transactions. They will review your life insurance policy and medical records to provide a settlement offer. Upon acceptance, you receive a lump sum payment, and the company takes over the policy premiums and becomes the beneficiary.

The taxation of viatical settlements in New York, as in other states, depends on the circumstances of the settlement. Generally, viatical settlements are not taxed if the insured is chronically or terminally ill, according to IRS guidelines. However, tax laws are complex and can change, so consulting a tax advisor for the most current advice is recommended.

Yes, New York regulations typically provide a rescission period during which you can change your mind after accepting a viatical settlement offer. This period is often 15 days from the date you receive the settlement funds. If you decide to rescind the agreement within this period, you must return all funds received.

New York has strict laws and regulations to protect your privacy during the viatical settlement process. Providers are required to adhere to confidentiality standards, ensuring personal and medical information is securely handled and disclosed only as necessary to complete the settlement.

When selecting a viatical settlement provider in New York, look for reputable, licensed companies such as American Life Fund. It’s important to assess their experience, customer service, and compliance with New York regulations. Consulting reviews and seeking recommendations can also help in making an informed decision.

In New York, policyholders have several rights in viatical settlement transactions, including the right to a detailed disclosure statement from the provider, outlining the terms of the settlement; the right to privacy protection; and the right to rescind the settlement within a specific period after receiving the funds.

Once the policy is sold, any changes to your life expectancy do not affect the settlement. The viatical settlement provider, such as American Life Fund, assumes the risk. This means the initial agreement remains in place regardless of any changes in health status after the policy sale.

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