A viatical settlement refers to the sale of your life insurance policy. If you have been diagnosed with a terminal illness you can opt to sell your policy through a viatical settlement provider.
One of the advantages of a viatical settlement is that you will be paid a cash sum. The amount will exceed the sum you would be paid if you opted to surrender the policy for a cash payout, but it will be lower than the cash value of the policy. Any future policy costs are the responsibility of the buyer. The buyer becomes the policyholder and beneficiary of your life insurance policy.
You can use the money you receive from a viatical settlement to cover a number of expenses, including the ones explored here.
1. Medical Treatment
You may have medical debts due to your illness. You may also need money to cover the costs of prescriptions and ongoing treatment. Estimates indicate it can cost $100,000 a year just for medication to treat cancer.
A viatical settlement can help prevent bankruptcy while ensuring you receive the medical care that you need.
2. Personal Care
You may need regular nursing services and personal care due to your illness. Home health aides can come to your residence and monitor your health. They may also be authorized to give you medication and assist you with exercises and other health-related needs.
Personal care aides can cook and clean for you. They may also transport you to medical appointments or take you to visit friends or family. You may need a personal care aide if you are unable to perform routine tasks yourself due to your illness.
3. Bucket List
A bucket list is a list of things that a person would like to do before they pass away. With financial resources from the sale of your life insurance policy, you can invest in your dreams and check some items off your list.
Popular bucket list items include traveling, riding in a hot air balloon, learning how to surf, and writing a book. You may also want to revisit locations that were important to you when you were young, such as places where you went on family vacations or where you had your first date with your spouse.
4. Personal Debts
You may opt to use the settlement money to cover some of your personal debts so that you do not pass those on to your family after you pass. Settlement money can be used to pay off your mortgage, automobile, or credit cards.
There may be early payment penalties for paying off your mortgage. If this is the case, you can opt to set aside the money needed for these payments so that your dependents will not incur the cost.
5. Family Needs
You may opt to use some of your financial resources to help adult children with their personal needs. You can also invest in your child’s education. You may have a child who is interested in earning automotive and diesel certifications so that they can work as an automotive or diesel mechanic. Aspiring mechanics and technicians will learn about diesel engines and acquire the automotive repair skills needed to have a successful career as a diesel mechanic. You can opt to use funds to help them complete their education so that they can enter the workforce without student loan debt.
You may have children who are minors and will require care. You can ensure their guardians will have the financial resources needed to provide for your children after you pass away by setting up a trust for each child.
You may also have pets that will require care during your illness or after your passing. You can establish a fund for your pets’ new owners or guardians to use to cover veterinary expenses, food, and other costs.
7. Final Expenses
You can plan your funeral and cover the costs prior to passing. This is an effective way to ensure your dependents are not responsible for these expenses.
Planning your own funeral also ensures that your dependents will not have to make difficult decisions when they are grieving. You will have peace of mind knowing that all arrangements have been made and that your personal wishes will be respected.