Seneca said that the best ideas are common property. What makes them different is how they're put into practice. This is how Individual Benefits handles the viatical settlement.
The Viaticum, Then and Now
The word "viatical" comes from the Latin word "viaticum," or "provision for the journey." With a viaticum, the Roman soldier was given supplies for his journey into battle, possibly the final journey of his life.
Over two millennia later, a relatively new industry has adopted this ancient concept, revived and revised, to give people faced with life-threatening illnesses some remarkable prospects.
Anyone with a life-threatening illness such as Cancer, AIDS, Heart disease, Alzheimer's, or Multiple Sclerosis, can sell an eligible life insurance policy for cash. To qualify, the seller must be diagnosed with a terminal illness and must have the option to change the right of ownership or to freely assign coverage on the policy. In most cases, the coverage can not be subject to any existing suicide exclusion clauses or contestability periods.*
* A suicide exclusion
Typical offers on the face value range from 30% to 85%, and the cash, or viatical settlement, is usually paid within three to five weeks of application, depending on how long it takes to obtain medical records and policy details.
During the contestability period, the insurance company may challenge benefits claims on the grounds of alleged application misstatements by the insured. The policy is
usually incontestable after two years of uninterrupted coverage.
If you are a prospective seller (viator) all you have to do, after you contact Individual Benefits, is fill out a short application and return it via fax, e-mail, or in a prepaid return airbill. We'll take it from there, and we won't drag our feet.
As soon as we've received your application, a counselor will call you right away to answer all your questions and address all your concerns. You'll get the best financial advice for your situation. And we promise absolute confidentiality.
On receipt of your application, we'll request your medical records immediately. We pay the costs and do all the work. Your insurance company is contacted for the details on your coverage. Then we evaluate your policy terms and have an independent physician review your medical records. With your permission, the independent physician will consult your doctor, who is most familiar with your condition. In our experience, this consultation is frequently the key to offering the maximum for your policy.
As soon as possible, probably about three working days after we receive all the medical information, we will have solicited several offers, and at that time will give you the best offer. If you accept, your funds will be placed into an independent account immediately, and a contract is overnighted to you.
Once the insurance company has assigned your policy, changed the beneficiary designation, and sent us an acknowledgment of both, you receive your money within 24 to 48 hours.
It's not just accurate answers you need. We'll help you ask the right questions, so you can find the right solution for your situation.
Are there alternatives to a viatical settlement?
Yes, there are three other options. First, you may be able to borrow against your life insurance policy. Second, either your policy or insurer may provide an accelerated benefits option. Finally, you may be able to cash out your policy if it has any cash surrender value. (See our Consumer Guide.)
What are the fees involved?
There are none. You will never pay Individual Benefits any application fees, medical evaluation charges, or any other costs, ever.
Can I change my mind?
Yes, at any time prior to receiving your settlement, without obligation or fees. We also recommend that you check your contract to make certain it includes a 15-day rescision period after the sale of your policy.
What if I live longer than doctors estimated or go into an unexpected remission?
We would be happy for you. Remember that we act on your behalf to get you the best offer and are not concerned about returns on an investment or managing a portfolio. Under no circumstances would you be required
to return any portion of the settlement; it's yours to keep.
No. These funds can be used any way the seller wishes: for living expenses, as donations, to pay for medical treatments, even to buy a car, a home or go on vacation. It doesn't matter.
What about my confidentiality?
Only your primary physician, your insurance company or benefits administrator, or anyone you specifically authorize. We protect your privacy and guarantee that Individual Benefits will never give lists of names or social security numbers to government or private agencies.
Where do my beneficiaries enter into the process?
Any person listed as a beneficiary must sign a release and waive all current and future rights in the proceeds from your policy.
What about taxes on the sale of a life insurance policy?
In January of 1997, Congress passed legislation to eliminate federal income tax on the proceeds of viatical settlements and accelerated death benefits. The law went into effect January 1, 1997. [For more details, see our Consumer Guide.]
Will my settlement affect my state or federal aid?
It might adversely affect your qualification status for income-based federal or state financial assistance, such as supplemental Social Security benefits, Medicare, and food stamps. Again, it's best to consult an attorney and/or cpa.
What about future premiums on my policy?
Your responsibility ends with the sale of the policy. You pay no more premiums, except in the case of Federal employees' government life insurance (FEGLI). Federal employees and annuitants are required by the government to continue paying the premiums even after assigning their coverage.
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