Viatical Terms

Viatical Industry Terminology

Beneficiary: The person or company who will receive the proceeds of the insurance policy once the insured or viator has passed.

Viatical Broker: A company that negotiates with viatical funding companies on the behalf of the viator to ensure they receive the highest offers available in the current market. Viatical Brokers provide protection for the viator and take care of the entire settlement process.

Contestability Period: Conditions set by an insurance company in which the insurance company can contest the payment of a death benefit or cancel the policy should the insured die within a certain time period or under certain conditions, or should the policy have been obtained fraudulently. Typically the time period in which an insurance company can contest an insurance policy is two years.

Face Value/Death Benefit: The amount of money to be paid by the insurance company to the beneficiary upon the death of the insured.

Viatical Settlement (from the Latin "Viaticum" (vi-at'-i-kum), historically, an allowance for traveling expenses or provisions for a journey.) n. The sale of a life insurance policy to a third party in exchange for a lump sum. The third party becomes the owner and beneficiary of the life insurance policy. A viatical settlement is sometimes referred to as a viatical life settlement

Viaticate (vi-at-i-kate) (Historically, to furnish with the provisions necessary for a journey.) v. To sell a life insurance policy to a third party when the insured is terminally ill.

Viator: A person whose life is insured by a life insurance contract or certificate who wishes to sell or has sold the beneficial interest in his or her life insurance contract for a lump sum.

Viatical Settlement Contract: An agreement between a viator and a viatical settlement provider or company [see below] to transfer the life insurance death benefit of the viator in exchange for money, typically for an amount of money less than the total death benefit of the policy.

Viatical Settlement Provider / Viatical Settlement Company: A person or company that buys death benefits of life insurance policies from individuals for less than the expected death benefits, for the purpose of reselling them or who arranges for such purchases. Viatical settlement providers then sell the death benefits, at marked-up prices, as investments to individuals who expect to receive profits upon the deaths of the viators.

Should I do a Viatical Settlement?

Viatical settlements provide a way for the chronically ill with life insurance to get money. Common reasons people take part in viatical settlements are because they cannot afford their life insurance premiums or need some extra money to cover their expenses. If you fall into either of these categories, a viatical settlement may be right for you.

If you have any questions or concerns regarding viatical settlements or would like to get some advice regarding viatical settlements, please feel free to send a request