Compassion driven. Not commission driven.
Serious, chronic, or life threatening illness
A note from Carole S. Fiedler, Viatical Settlement Broker, owner and founder of Innovative Settlements: The Life Insurance Settlement industry began, with provider companies offering viatical settlements in 1989. A viatical settlement is the sale of a life insurance policy of an insured of any age who has been diagnosed with a life-threatening illness and is expected to live less than 24 months. I joined one of the very first viatical settlement brokerages in 1992.
At the time, almost 100% of my clients were people with AIDS, many of whom had no heirs or family to leave their life insurance benefit to, yet they had large, group policies offered through their jobs. There were only five provider companies buying life insurance policies then, and it became clear that policy sellers needed an advocate to ensure they would get the highest possible amount for their policies and that the process went quickly and smoothly and with as little stress as possible. Hence, the birth of viatical settlement brokers. I am one of the first, and the only one who has remained a policy seller’s advocate ever since.
Negotiating finances while dealing with a terminal illness is very challenging as well as difficult. A viatical settlement can be a financially responsible way to take care of debts and improve your quality of life. There are no restrictions on how the proceeds from a viatical settlement are used. A viatical settlement is not the right fix for everyone. An experienced Viatical Settlement Broker can help you understand your options. If you think a viatical settlement might be right in your situation, I urge you to contact me at Innovative Settlements for honest, straightforward information.
What is a viatical settlement?
A viatical settlement is the sale of a life insurance policy of an insured of any age who has been diagnosed with a life-threatening illness and is expected to live less than 24 months. Qualified, properly executed viatical settlement proceeds are free of federal tax.
- Life expectancy is what actually determines if a case is a viatical settlement or a life settlement. The basic process – transferring the policy in exchange for a cash settlement- is identical.
- A life expectancy of 24 months or less is technically a viatical settlement and should be treated as such. Viatical brokers and funders require specialized licensing in many states and provide the policy seller with specific protections.
- Proceeds from qualified viatical settlements are federally tax-free and may be State tax few as well.
- As with any important financial transaction, you should speak with an accountant, attorney or other qualified professional. We are prohibited from giving tax advice.
Insurance Policy Requirements
These are the general basic qualifying characteristics of eligible life insurance policies:
- Life insurance policies must be more than two (2) years old and not subject to a contestability or suicide exclusion.
- Term policies must be convertible in most cases.
- Policies with no loans are preferred.
- Minimum face values are $100,000. (the market for policies under $250,000 is not very competitive).
- Larger policies with proportionately low premiums are most desirable and offers most options.
- We have buyers of policies ranging from $100,000 to multi-million dollar policies.
- High profile clients trust us because we understand that discretion is a must!
Regulations have been changing rapidly in the past 5 years and not all states require licensing. We are able to do business in most states and for those where we cannot, we will refer you to a trusted friend in the business who can help you. You may also check with your own state’s Department of Insurance to determine if licensing is required. To locate the link for your state’s DOI, go to www.naic.com.