Despite being an excellent financial resource for many Americans who are facing the end of life treatment, viatical settlements remain somewhat unknown. Even the term “viatical settlement” can sound like confusing legalese initially, not like the straightforward process it actually is. If you or someone you love has recently received a terminal diagnosis, like a cancer diagnosis or a heart condition that can’t be treated, a viatical settlement is a great solution to the medical expenses that may be piling up.
Basically, if someone has a life insurance policy and is facing the last two years of their life, according to a doctor’s prognosis, they can sell their policy to a viatical settlement company and receive a lump sum payout in cash. The viatical settlement companies then transfer the life insurance policy to a third party, who becomes responsible for all further premium payments. That third party will also become the beneficiary of the death benefit upon the original policyholder’s passing.
This may sound morbid, but it’s actually quite practical. After all, if your beneficiaries are doing fine, then you don’t need the death benefit once you’ve passed. You can use that money for plenty of expenses—it’s not taxable—or even to make some end of life wishes come true. In fact, there are plenty of reasons that a viatical settlement may be the right move for you or someone you love. Read on to learn about a few reasons why someone might opt to call up a viatical settlement broker and research their options.
The patient needs constant care.
Some diagnoses are more difficult to manage than others and, as the time of passing grows near, may require increasing amounts of care. This may mean finding a hospice for the patient to reside in, where they can be made comfortable and helped through their days. This may also mean finding a caretaker to care for the patient at the home where they currently reside. There are lots of options out there for chronic care management.
More often than not, family members find themselves in the role of caregiver for an aging parent or another loved one. While this may seem like the logical solution for various logistical and financial reasons, it’s not always the right choice. If a family member isn’t a trainee of a care-person, it can even be dangerous. Being a caregiver may also take a major emotional toll on the family member who not only has to watch their parent die and experience their suffering daily in the most physical of terms.
If the reasons you’re avoiding hiring someone to take care of the chronic care for your loved one, you may consider a viatical settlement. With the lump sum you receive for the patient’s life insurance policy, you can pay for a caregiver or hospice care. This will relieve some of the stress from you and ensure that your parent or loved one receives the best chronic care available.
The patient is paying directly for pain management.
Another thing that, unfortunately, comes with a terminal diagnosis is often pain. Towards the end, the pain cannot be solved. It can only be mitigated. The problem is that mitigating that pain may be very expensive. If a patient is paying for their pain medication from their own pockets or paying co-pays, those medical expenses pile up very quickly.
Whether your family member needs increasing pain medication, Orofacial pain treatment, physical and occupational therapy, or any other type of pain management, it’s worthwhile to look into paying for it with a life insurance policy buyout. Not only can the cash payment for any pain treatments, but you also won’t have the life insurance monthly premiums to worry about anymore. Fewer expenses mean more ability to pay for feeling better.
The patient has a few more items on their bucket list.
Maybe the patient has received a cancer diagnosis but isn’t feeling too badly yet. Despite having 18 months or so to live, they feel robust and energetic. Why not take advantage of those 18 months and do everything they’ve wanted to do? Sit down together with your loved one and write out a bucket list. Then start checking things off.
Have they always dreamed of going to Paris and eating a croissant in a classic Parisian cafe? Check. Always wanted to take cooking classes from a professional chef, so you finally know how to avoid hurting yourself in the kitchen (and make the world’s best tiramisu)? Check. Dreamed of bicycling around Iceland and seeing the Northern Lights? Check, check, check. Seeing as the cash payout from a viatical settlement isn’t taxable and can be used however you want to, this might be a great opportunity to make some memories with someone who won’t be around for much longer. This is one way to use the option of a viatical settlement to enjoy the rest of your time together.
The patient has a lot of debt.
Americans have a lot of debt, generally speaking, so someone could find themselves facing a terminal diagnosis. Simultaneously, it also brings tens of thousands in the red, which actually wouldn’t be so unusual. The average U.S. citizen carries $38,000 or so in debt, and many carry much more. Whether it’s student debt, medical debt, or credit card debt, it can be not easy to dig yourself out of a hole once you’ve begun to climb. Many many people choose to utilize the option of a viatical settlement is to get rid of that burden before they pass. After all, children may end up inheriting the debts of their parents after they pass. That’s not what anyone wants to leave their kids to remember them by. If a patient has a lot of money that they owe to various organizations and entities, it’s worthwhile to find out if some of that might be paid for by selling a life insurance policy.
None of this is anything anyone wants to think about. We all wish we could be here forever, enjoying one another’s company and feeling wonderful. Unfortunately, death is a part of life, and there are ways of making it more comfortable. A viatical settlement is just one more of the tools at hand.
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