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Viatical Settlements - Viatical Settlements The term viatical gets its name from the Latin word viaticum, which means provisions for a journey. Viatical settlements are payments made in cash to people who sell their life insurance. They are basically transactions whereby a written agreement is entered into, under which a life settlement provider acquires a policy. the policy insures the life of a particular individual by paying the owner or certificate holder compensation that is less than the net death benefit pertaining to the policy. It then becomes the buyer's responsibility to pay the remaining premiums. Upon the viator's demise, the buyer might collect the benefits. Both parties face a certain degree of risk. The risk for the viator is that he might have to sell the policy at a very low rate. The investor additionally risks losing dollars if the viator lives longer than his expected lifetime prediction. But if the seller pertaining to the policy dies sooner than was estimated, the buyer is in for a profit. There is 1 more angle, including that is the risk pertaining to the insurance company going bankrupt, in which case the investor suffers. There are additionally chances that the insured had committed some sort of fraud while filling in the life insurance application, including so the insurance company may not be in a position to pay the benefits. Given the above scenario, the question arises why 1 should go in for viatical settlements. The positive side is that the viator (seller) gets lump sum settlements to ease the financial strains of his final days. The buyer gains by becoming the beneficiary pertaining to the policy. It is a gamble - a gamble on death. the may sound disturbing to a lot of people, but if the transaction is carried out in a fair manner, the settlements might provide relieve the financial strains pertaining to the user who is already undergoing the emotional including physical trauma of a terminal illness.
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