People who are terminally or chronically ill can sell their life insurance death benefits to third party buyers. This is called a viatical settlement. Life settlement transactions also involve selling life insurance death benefits, but the sellers don’t have to be terminally or chronically ill. Both life and viatical settlements pay the policyholder more than the life insurance’s face value, but viatical settlements have the highest payout.
Since viatical settlement buyers pay more considerable sums for viaticals, you must employ due diligence before finalizing viaticals. Avoiding the common mistakes outlined here will ensure you make sound decisions when investing in viatical settlements.
1. Don’t assume you’ve been approached by professionals
Viatical settlement companies employ individuals who have their brokers license. They’re aware of viatical and life settlement regulations and comply with the regulations. When you work with a reputable company, such as americanlifefund.com, you’ll have the peace of mind that comes from knowing they’re following all the required steps to complete a legal viatical settlement.
American Life Fund completes confidential transactions, which means your personal information is protected, and you don’t have to worry about anyone disclosing your investments to the public. They also work with the viators instead of brokers representing viators, ensuring the viators receive more money and pay fewer fees. This means that you’re providing more funds to individuals with chronic and terminal illnesses. It’s crucial you work with reputable, professional companies to ensure the settlement is handled correctly.
2. Don’t assume you understand the prognosis
Anyone diagnosed with a chronic or terminal illness may qualify to be a viator. Typically, viatical settlements are restricted to individuals whose life expectancy is less than 25 months. Although licensed professionals with viatical settlement companies review the viator’s medical data to confirm their eligibility, the prognosis isn’t a guarantee.
There are several types of chronic illnesses, including heart disease, diabetes, Alzheimer’s disease, respiratory disease, and cancer. There are over eight dozen different types of cancer, including breast cancer, lung cancer, liver cancer, and prostate cancer. A patient’s prognosis may be influenced by their family history, particularly if family members have died from the disease. The prognosis may also be affected by the location of the tumor.
Each potential diagnosis has varying degrees of severity. When cancer is diagnosed early and can be removed, it’s possible to successfully treat some types of cancer. A patient’s prognosis may be more favorable if they have cancer with a higher survival rate, such as breast cancer or thyroid cancer.
The patient’s prognosis will be less favorable if they’re diagnosed with a kind of cancer that’s harder to treat successfully. For example, pancreatic cancer is one of the deadliest cancers because surgery’s rarely an option, and chemotherapy is less effective on pancreatic cancer than other kinds of cancer, reducing the treatment options for individuals diagnosed with this version of the disease. Before you invest in viaticals, you should learn about different chronic and terminal illnesses and understand the variables that could affect the viator’s prognosis.
3. Don’t overlook the details
Viatical settlement companies want to deliver funds to viators as quickly as possible. This is understandable because these individuals are coping with a severe illness and may need financial help to pay for their medical treatment or personal care. However, for investors, it’s crucial to take the time required to review the details to ensure you understand the terms and conditions.
Don’t rush the process. Ensure you understand the type of life insurance policy the viator is selling death benefits for. Ensure the paperwork’s in order and that the viatical settlement company reviewed the viator’s medical records. Double-checking that the process has been completed correctly ensures you make sound financial investments.
4. Don’t skip the math
For viators, a viatical settlement may be a financial lifeline that enables them to pay medical bills, pursue clinical trials, and live comfortably during their final months. For buyers, a viatical settlement is a financial investment, and the goal is to profit financially. This means you need to receive more money from the death benefits than you pay.
In addition to the money you pay for the death benefits, you’re required to pay any monthly premiums still owed on the viator’s policy. It’s also crucial to consider the possibility that the viator will live longer than expected, mainly if there are new clinical trials that could extend their lives. Your costs could increase if you have to make more policy payments.
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Viatical settlement investors are third party buyers who pay money for a viator’s life insurance policy death benefits. Investors can avoid making common mistakes by working with qualified viatical settlement companies, learning about terminal and chronic illnesses, carefully reviewing the purchase details, and calculating the total cost of the agreement before investing in a viatical settlement.