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Viatical Life Insurance Settlements

What is a Viatical Trust Settlement Agreements?

A viatical life insurance settlement is an agreement between a business firm (specializing in such transactions) and a life insurance policyowner insuring the life of an individual with a life-threatening or terminal illness, normally with a life expectancy of two years or less.


The firm purchases the policy at 60 to 80% of the face amount, expecting to profit as the new policyowner. The insured is provided with tax exempt discounted value during the terminal illness, relinquishing all ownership rights to the buyer (e.g. an insured has a $100,000 policy and the Viatical Agreement is $60,000, the new owner upon the insured’s death could profit up to $40,000 less a very minimum business expense). The discounted proceeds are received by the insured at the time of the agreement. The policy must be in force when the agreement takes place. This is the latest use of life insurance.

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