With a viatical settlement, those who qualify can sell their life insurance policy to a third party in exchange for cash right now. This can be a great financial move, depending on your needs. So why should you pursue a viatical settlement? Here are four great reasons.
To pay down medical bills
The reason that viatical settlements exist is to help sick people, and sick people tend to have a specific and large financial headache: medical bills. High healthcare costs and growing medical debt are epidemic in this country, and the chronically and terminally ill often bear the brunt of these financial woes.
But if you sell your life insurance policy to a viatical settlement provider, you could net enough cash to pay down those bills and dodge debt — which, as we’ll see in a moment, is good for your loved ones as well as for you.
To protect your heirs
Most of us hope to leave something behind for our loved ones when we die. That isn’t always easy. Plenty of Americans are struggling, and many of us won’t be able to pass on the wealth that we wish we could. But how likely you are to leave behind a sizable estate will depend on more than just how much you have in the bank. Proper estate planning and careful financial decisions are essential.
Choosing whether or not to sell your life insurance policy is one of those crucial financial decisions. If you’re able to sell your policy for cash, you could use the money to pay down debts — which, in turn, will limit the amount of debt and interest that you carry forward. Tackling debt fast could spare you the cycle of debt and help you avoid ballooning interest that, if unchecked, could cost you — as well as your estate and heirs — far more than is lost when you sell your policy.
To gain a tax advantage
Viatical settlements exist to help people who are ill and who may be dealing with financial issues related to the high cost of their health care. Given that situation, the federal government helps by making viatical settlements tax-exempt. (Note, however, that life settlements are not; if you don’t qualify for a viatical settlement because of a longer life expectancy, you may qualify for a life settlement.)
Talk to a financial adviser. It’s possible that choosing a viatical settlement now could maximize tax savings for yourself and for your estate.
To live your best possible life
When you’re dealing with a terminal diagnosis, you have a lot on your plate. You won’t have much use for cash that arrives after you’ve already passed away. With the time you have left, you deserve to enjoy life to the fullest.
The money that you’d gain from a viatical settlement could help you do just that. With the cash you receive, you could go on a once-in-a-lifetime trip or gather your loved ones for a big visit. You could upgrade your lifestyle or simply make daily living more stress-free. Money isn’t everything, of course, but in a situation like yours, it could help you make the absolute most of the time you have.