Viaticals

Life insurance policies are designed to pay out upon the death of the insured. Sometimes, however, the money from a life insurance policy is needed during the individual's life. For example, if a patient becomes terminally ill, there may be a need for money to pay for medical care. What is known as a viatical can provide an option for people who need to cash out a life insurance policy before death. Essentially, this means that the insured individual will sell his or her policy for a sum equal to or less than the total value of the death benefit in exchange for receiving the money while still alive. The buyer of the policy will receive the death benefit in full upon the death of the insured. There are a number of laws governing viaticals and dictating how this process is carried out. It is important to know and understand these laws if you are considering selling your insurance policy.