adjective.
of or relating to a viaticum
. of or relating to a financial transaction in which a company buys life insurance policies from the terminally ill at less than their face value and may sell the policies to investors: viatical settlements.
What does viatical mean in English?
adjective.
of or relating to a viaticum
. of or relating to a financial transaction in which a company buys life insurance policies from the terminally ill at less than their face value and may sell the policies to investors: viatical settlements.
What is the difference between a viatical settlement and a life settlement?
Life settlements are also typically for people above 65 years old, whereas a viatical settlement is
designed to provide a relief option for a person of any age facing extreme medical circumstances
.
What does a viatical settlement allow?
A viatical settlement allows
you to invest in another person's life insurance policy
. With a viatical settlement, you purchase the policy (or part of it) at a price that is less than the death benefit of the policy. When the seller dies, you collect the death benefit.
Why are Viaticals a bad investment?
First, there
is the risk that you could lose or tie up your investment dollars indefinitely if the viatical settlement company
and/or the insurance company becomes insolvent. … Third, if the policy is a term life you may lose your investment if the insured outlives the term of the policy.
What is the primary feature of a viatical settlement?
(The primary feature of a viatical settlement is
the prepayment of a reduced death benefit
.)
Is a viatical settlement taxable?
Most of the time,
viatical settlements are not taxable
. Settlement proceeds for terminally ill insureds are considered an advance of the life insurance benefit. Life insurance benefits are tax-free, and so it follows that the viatical settlement wouldn't be taxed, either.
How much do viatical settlements pay?
While there is no guarantee of the percentage payout, it could range from
10% to 70%
.
Is it legal to buy someone's life insurance policy?
It's possible to take out a life insurance policy on another person with whom you have insurable interest, but
you cannot purchase life insurance for someone without their explicit consent
. The insured person must complete a medical examination and sign the policy themselves, even if they are not the policyholder.
Who does a viatical settlement broker represent?
“Viatical settlement broker” means
a licensed agent who acts on behalf of a viator
and for a fee, commission or other valuable consideration offers or attempts to negotiate viatical settlements between a viator and one or more viatical settlement providers.
Are viatical settlements legal?
Myth #4: Viatical settlements are tax free.
In 1996, the Health Insurance Portability and Accountability Act (HIPAA) was signed
into law
, making viatical settlements and accelerated death benefits income tax free for chronically ill and terminally ill insureds.
Who must approve viatical settlements?
Connecticut has acted to regulate viatical settlements under Connecticut General Statutes, Section 38a-465, et. seq. Viatical settlement companies and brokers must be licensed and
the Insurance Commissioner
must approve the contracts and forms used.
Are viatical settlements ethical?
“On
ethical grounds
, I have problems with people investing in viatical settlements,” said Paul Camp, assistant consumer science professor at UA. “It's morally reprehensible. You are placing your monetary gain and investment performance at a higher level of priority than someone's life.”
Are Viaticals a good investment?
While viatical settlements arise from very unfortunate circumstances, they are
fundamentally solid investments
. The investor purchases the policy at a discount from its face value, keeps the policy in force by paying the premiums, and, ultimately, collects the death benefit.
What is a viatical contract?
A viatical settlement is
a contractual agreement to provide a life insurance policyholder immediate cash in exchange for the sale and transfer of life insurance policy ownership rights
.
What does viatical investment mean?
VIATICAL INVESTMENT means
the contractual right to receive any portion of the death benefit or ownership of a life insurance policy or certificate
, for consideration that is less than the expected death benefit of the life insurance policy or certificate.
