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VIATICAL Do you qualify for a viatical settlement. Free Quotes, No obligation |
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Contact our specialists on viatical
Toll Free Help: 866-613-3636
Toll Free Help: 866-613-3636
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Contact our specialists on viatical Toll Free Help: 866-613-3636 |
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Some, too, distribute the proceeds of their settlement to friends and loved ones, charities and schools. And still others splurge on a dream vacation or start a home-based business so they can continue supporting themselves. "From an AIDS community perspective, a lot of groups didn't want to get engaged in this because they see it as a 
gruesome issue," said Jeffrey Crowley, deputy executive programs director
for the National Association of People with AIDS. "But people with
HIV need options and [viatical settlements] really can be an important means
of financial assistance for people who are at the end of their lives."
In some cases, he said, even $10,000 or $20,000 can mean the difference between financial independence and a broken bank account. But before they make the sale, Crowley said NAPWA always advises individuals to shop around and to seek out professional tax and estate planning advice. "We always counsel people to never accept the first offer they hear," he said, noting there are a group of viatical brokers who can walk you through the process and do some comparison shopping for you. Viatical settlements, of course, aren't just restricted to people with AIDS. They're available as an option for anyone with a life-threatening disease. If you, or someone you know, is considering a viatical settlement, you should at least seek answers to the questions laid out in the chart below. If you do viaticate, the NAIC said you should be aware that the proceeds you collect are subject to the claims of creditors. Moreover, you may inadvertently render yourself ineligible for federal assistance programs, including Medicaid and food stamps. A few other tips: Make sure the viatical settlement provider agrees to put your settlement process in escrow with an independent party or financial institution to make sure your funds are safe during the transfer. And always ask if you've got the right to change your mind after you get the proceeds. If you do have that right, you'll have to repay the proceeds, of course. The tax ramifications of entering into a viatical settlement are hugely complex. As such, the NVA recommends all would-be viaticators consult a tax professional first. But generally speaking, the NVA said it's safe to assume that the Internal Revenue Service deems viatical settlement proceeds tax-free if the original policy holder has a life expectancy of less than 2 years. Certain other criteria must be met as well. If the viator is not terminally ill, but instead was eligible to viaticate due to chronic illness, there are other tax considerations as well. Risks Add to the potential drawbacks of viatical settlements the growing concern about frauds - not just for the policy seller but for the policy buyer as well. Late last month, Florida Treasurer and Insurance Commissioner Bill Nelson charged American Benefits Services Inc., a South Florida viatical broker, with deception and misrepresentation. The company allegedly sold to investors blocks of life insurance policies that weren't valid. "Viatical settlements have been determined as one of the top ten investment scams," said Terri Vaughan, Iowa Insurance Commissioner and Chair of the NAIC's Life Insurance Committee. To prevent more life insurance holders and policy buyers from becoming victims, the group last month pulled together three draft brochures explaining the pros and cons of selling life insurance policies. Copies of the brochures, which have not been finalized, are available on the NAIC's Web site at www.naic.org. Bottom line, it says: always check with a professional before signing anything. |
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