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Idris Gatsby
Idris Gatsby
Senior Staff Writer

Are Viatical Settlements a Good Source of Money?

In 2017, 1.49 million patients in the United States entered hospice care. Hospice care is designed for terminally ill patients who need round-the-clock care. The focus is on helping individuals manage their pain and maintaining their emotional health in their final days.

Your health insurance plan may cover some or all of the costs of hospice care, but most terminally ill patients and their families struggle financially due to loss of income and the cost of medical expenses. If you or a loved one is terminally ill, you may be wondering if a viatical settlement is right for you. Read on to explore what viatical settlements are, how to obtain one, and other ways you can ease the financial burden of a terminal illness.

What is a viatical settlement?


Viatical settlements involve selling your life insurance policy while you’re still living. Viatical settlements are available for people who are terminally ill and can establish their medical condition and life expectancy. A person who opts to pursue a viatical settlement will receive a single cash payment, dependent on the amount of death benefit and their life expectancy, from a buyer in exchange for their life insurance policy.

The buyer assumes responsibility for any outstanding policy payments owed. They also become the beneficiary of the policy and receive the death benefit payout upon your death.

How can you get a viatical settlement?


The first step is to contact a viatical settlement company. The viatical settlement provider will walk you through the process of selling your life insurance policy and finding a buyer. The settlement provider will also gather relevant data to establish that you qualify for a viatical settlement and not a life settlement. Viatical settlements are specifically for people who are terminally ill. Healthy people can opt to sell their life insurance policy for what’s called a life settlement. The distinction between these two settlement options is crucial. Buyers assume a higher risk when purchasing a policy from a healthy policyholder. Hence, they pay less money for life settlements because they may have to wait several years or decades before collecting the payout from the insurance policy. Life settlements are also taxable, while viatical settlements are not. All of these are important differences for a policyholder to understand before moving forwards.

Are there ways to reduce the cost of prescriptions?


Obtain a pharmacy discount card to reduce your out-of-pocket costs for prescription medications. Pharmacy discount cards are free, and they can be used at over 62,000 pharmacies throughout the United States. The pharmacy discount card company purchases bulk amounts of medication at a discount, which is how they can pass savings on to consumers. Both independent and chain pharmacies participate in this discount savings program.

Once you have your card, you can take your prescription to a participating pharmacy and present your card to the pharmacist. Depending on the medication, you can save up to 80% off the out-of-pocket costs. You can also pursue pharmaceutical assistance programs that may provide you with free medications or help cover copay costs.

Are there other ways to cover the cost of treatment?


Some companies offer free treatment to patients who participate in clinical trials. This can be an effective way of reducing your medical expenses, but it’s important to remember these trials are not proven to be effective. You may want to try established medical treatments first.

What other sources of financial assistance are available?


You may be eligible to receive food stamps and disability due to your illness. Job loss and loss of income may mean you qualify for Medicaid or Medicare. It’s a good idea to apply for all benefit options. You may not realize you qualify for benefits that could reduce your expenses significantly during your illness.

The American Cancer Society provides transportation to medical appointments. It is one of several organizations that meet the transportation needs of people with terminal illnesses. Some organizations offer financial assistance for individuals who are terminally ill.

Are viatical settlements a good option?



Viatical settlements offer several benefits. The policyholder who sells their lie insurance policy will gain access to cash while they’re still alive and can use the money any way they choose. With the funds, you can pay for medical treatments, settle debts, establish trust funds for dependents, or go on a dream vacation. There’s no limit to how you can use the viatical settlement, so it’s worth considering if you have some dreams you’d like to realize despite your illness. Remember, the money you’ll receive is also tax-free, which means you don’t need to worry about it impacting your eligibility for benefits programs.