Viatical Settlement vs. Life Settlement — What Is the Difference?

Life settlement and viatical settlement are two terms that are often confused — and for good reason. Both involve selling a life insurance policy to a third-party buyer for a lump sum cash payment. The key difference is the health status of the policyholder.

A life settlement is available to policyholders who are generally age 62 or older, regardless of health status. The policy is sold based primarily on the insured's age, health history, and the policy's terms.

A viatical settlement is specifically designed for policyholders who have been diagnosed with a chronic or terminal illness. Because the life expectancy is shorter, buyers are typically willing to pay a higher percentage of the policy's face value — sometimes significantly more than a standard life settlement would yield.

In both cases, the policyholder receives cash, stops paying premiums, and the buyer takes over the policy. The difference in payout can be substantial depending on the diagnosis and prognosis.

Not sure which applies to your situation? Call Jack Davis at Eagles Soar Enterprises — 727.735.3200 — for a free, confidential policy review. Jack will evaluate your specific circumstances and present the options that make the most sense for you.