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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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Review your optionsLastly, before you decide to viaticate, you should at least explore your options. The most common alternative for the terminally or chronically ill is Accelerated Death Benefits (ADBs) -- the insurance companies' answer to viatical settlements. ADBs are a feature of a life insurance policy that, like viatical settlements, allow the holder to collect some or all of the policy's death benefit before the insured dies. These days, Foley of the Kansas State Insurance Department said nearly all insurance companies include an accelerated death benefit provision. Most allow you to accelerate, or take out, up to half of your policy's total death benefit, he said. But some enable you to take out nearly all of it."As far as I'm concerned, the viatical settlement should be your last option," Foley said. The primary difference between viatical settlements and ADBs is that in an accelerated death benefit transaction, there is no third party involved. You arrange the deal directly with your insurance company and, perhaps most importantly, your designated beneficiaries receive the unused portion of your policy's death benefit after you die. "The number one thing I would advise if you find out you need money (due to a terminal illness) is to contact your insurance company first and find out your options," Foley said. Moreover, Foley added, the concept of a disinterested third party owning your life insurance policy raises a number of ethical questions. "Here we have me owning a policy on your life where I stand to gain from you dying sooner rather than later (since premium payments would stop)," he said. "I'm really fearful that we are going to have one or more catastrophic events happen, where it will be shown that people are murdered to collect the policy." If it's happened with other beneficiaries who kill their loved ones for their life insurance policy, he said, why couldn't that happen in this industry? But Cooper of the NVA said that's absurd. She noted there have been no reported cases of such an incident, and said professional viatical companies and brokers take careful pains to ensure the ultimate buyer of viatical settlements never gets personal information on the original policy owners. Moreover, she noted ADBs can sometimes be restrictive, only allowing individuals to cash out of their insurance policy toward the very end of their lives. Even so, Foley said ADBs have the dual effect of providing the terminally ill with upfront cash and leaving a little behind for the beneficiaries -- the ones for whom the policy was purchased in the first place. He also noted there are many other ways to come up with cash, too. "I would ask people to investigate getting loans instead, either from banks or other financial institutions and even from relatives," Foley said. "You can almost set up your own viatical settlement, where you borrow $40,000 from your aunt and agree that your spouse will repay that amount from the death benefit when you die.You can also find out if you have any cash value in your life insurance policy. You may be able to use some of the cash value to meet your immediate needs and keep your policy in force for your beneficiaries. And lastly, the NAIC said you may also be able to use the cash value as security for a loan from a financial institution. |
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