A viator is a dying person or one suffering from a life-threatening illness who sells his or her life insurance for a substantially discounted rate to the insurance firm. A viator receives a portion of his or her insurance policy’s total value in cash payment which normally ranges from 50 to 70% from the buyer. The terminally-ill policyholder usually sells his or her insurance policy to either pay medical bills and other related costs or to keep up with the living expenses and lessen the financial burdens caused by the illness. The buyer on the other hand, gets benefited in purchasing the insurance policy since the coverage is obtained at a low price and when the aviator dies, the buyer gets a larger amount in return of the purchased insurance policy. An insurance buyer can be a friend, a viatical company, broker or even a family member.
Viators and insurance buyers execute the sale through viatical settlement. In this settlement, when the insurance policy of the ill person is already sold, the buyer gets the insurance money which was primarily intended to be paid out to the insured person’s survivors. The lump sum which the insurance buyer pays to the viator entitles him or her to become the beneficiary by getting the pay-out from the insurance policy in the event of the insured person dies. The insurance policy is typically sold prior to the maturity of the insurance policy. During the viatical transaction, the terminally-ill insured person signs a document which entitles the purchasing party to be the beneficiary. The viator then gets paid and has 15 days after the payment to return the cash payment just in case he or she decides to. The purchasing party possesses the beneficiary rights when the insurance sale contract is perfected and gets the benefit when the insured person dies. The benefits in viatical settlement are enjoyed by both the viator and the buyer. It provides positive monetary returns on the part of the insured person while he or she is still alive and on the purchasing party when the insured dies.
There are considerations which are often taken into account before engaging in a viatical settlement. The purchasing party usually considers the size of the policy and the remaining lifespan of the viator. Insurance policies with total value of less than $10,000 are not typically preferred by lager firms. If the life expectancy of the ill insured is longer, the insurance policy gets a few and small offers. But when the insured’s remaining lifespan is shorter, the insurance policy gets additional value. Viatical negotiations typically take place when the policyholder is expected to die within two years. The purchasing party also checks the insured’s medical records as well as the entirety of the policy before getting into the agreement. One common misconception about viatical settlements is that people think investors get profited out of an ill person’s misfortune. This is however not true because viators actually get benefited by the cash payment of the insurance policy while still alive and gets financial help when there is no other source of funds available.
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