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Can group policies be the subject of a viatical settlement?
If the Group policy allows for an absolute assignment and/or an irrevocable beneficiary, then in some circumstances, the coverage can be the subject of a viatical settlement. However, all group policies are different, and some contain restrictions on assignability, beneficiary designations and/or conversion rights. Some also involve significant certain cancellation risks, and thus are not attractive to viatical purchasers. Others are likely to generate a relatively tiny portion of the face amount in terms of the payment to the insured, but potentially a huge profit to the brokers and purchasers.
One common form of group policy is Federal Employees' Group Life Insurance (FEGLI). These policies can be the subject of a viatical transaction, but because the insured has to continue paying the premiums on the coverage after it has been assigned, it can get complicated. However, as FEGLI also offers an Accelerated Death Benefit of over 90% of the face amount of the basic benefit to anyone with a life expectancy of less than nine months, it often solves the insured’s need for cash. A FEGLI insured one can either get the Accelerated Benefits Option free from the policy or sell part or all of the basic and optional coverages to a viatical company.
Serviceman's Group Life Insurance (SGLI) and Veteran's Group Life Insurance (VGLI) are not eligible for a viatical settlement unless they are first converted to individual policies which can be viaticated. However as the premium rates for the conversion policies are substantially higher than group rates, a sale may not make sense. |
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What is a viatical settlement?
What are accelerated benefits?
What is a life settlement?
Can group policies be the subject of a viatical settlement?
What are the alternatives to a viatical or life settlement?
Are viatical settlements subject to regulation?
What can I expect to receive if I sell my policy?
Can I sell a newly issued policy?
What is ‘clean sheeting’?
What are the legal and other risks of buying a viatical settlement?
What other risks are there in life settlements?
What are the risks in purchasing a life insurance policy as part of a viatical settlement or life settlement?
My tenant skipped out on his 2-year lease. I want to take him to small claims court to recoup 2 months rent. If I can’t rent the place beyond the two months, can I return to court to recover another month’s rent from the ex-tenant?
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