Despite the fact that viatical settlements provide an excellent financial option for those facing end of life expenses, like medical bills or debt, the term has not yet made it into common usage. This may have something to do with the fact that, as a culture, Americans don’t like to talk about death and dying. Nevertheless, even if we ignore death, it will come for each of us, and, if we face a terminal diagnosis, there are expenses involved.
A viatical settlement is basically a buyout of an insured person’s life insurance policy. Instead of continuing to pay premiums, the insured person gets a lump sum cash payout at the time of sale. The life insurance policy then becomes the property of a third party. That third party will take care of any additional premiums and will, in turn, be the beneficiary of the previously insured person’s death benefit upon his or her passing.
A viatical settlement provider or broker can help navigate this process. With a viatical settlement, you can have the money in your account tomorrow, instead of bequeathing that sum to your children or other beneficiaries. If you’re struggling to make ends meet as you near the end of your life, or you don’t want your beneficiaries to inherit your debt, a viatical settlement can be a great way to meet these goals. So, with that in mind, what can you spend the funds from a viatical settlement on?
Medical Bills or Medical Treatments
Technically speaking, there aren’t actually any restrictions on how you spend the funds from your viatical settlements. Actually, these funds aren’t even taxable. Nevertheless, most people with lower life expectancy tend to use money from a viatical settlement to cover medical costs. Whether you need regular dialysis or chemotherapy and radiation, healthcare is expensive, and having a major influx of money into your bank account can make a big impact on your ability to pay for treatments.
An accelerated death benefit can be an easy way to improve your quality of life now, while you’re still receiving medical bills. Also, if you aren’t able to pay those bills, they’ll become a debt that your beneficiaries then have to take care of. If the cash value of your life insurance policy can go towards lowering that burden, it might be a good idea.
Debts don’t have to be medically related, either. Americans carry an average of $90,460 when it comes to personal debt. Maybe you recently had a lawsuit on your hands, and now you owe legal fees. Or you lost your small claims court case, and now you owe someone compensation. Whatever the case may be, the cash value of your life insurance policy can help out here as well.
Before you opt for a viatical settlement, do your homework, though. Did you know that court case documents and rulings are available to the public? You may be able to appeal your small claims court case, civil case, or criminal case before you authorize any financial institution to send funds to the other party. Look up your case file’s electronic record and make sure before you contact a viatical settlement provider.
Upgrading the Value of Your Home
One way to provide for your beneficiaries is by leaving them assets that are worth a good amount of money. If you own real estate property, such as your own home, you can use the cash value of your policy’s death benefit to pay for a kitchen upgrade. When you upgrade your kitchen you’re actually adding to the value of the whole home, plus making it much more appealing to potential future buyers. This can be easy, too. New tile backsplash, a kitchen island, new countertops, and cabinets or appliances like a stove or refrigerator‚Äîthese are all things that make a huge difference and can leave your family members with a home they can sell for much more than they would have gotten from the life insurance policy’s death benefit.
If you’re facing a chronic illness turned terminal, you have to make some difficult decisions. Some of these, unfortunately, are financial and, while it’s not pleasant, you can make things easier by making sure that you have the funds to provide for yourself and your family. There are no restrictions on how you spend your viatical settlement money, so, if you have a life insurance policy, it’s worth your while to contact a viatical settlement company and see if a broker can help you find the best solution for you.