Viatical Settlement Navigator

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Our mission at Pivotal is to be your reliable resource for comprehensive insights into viatical settlements. Equipped with the latest information, we aim to enhance your understanding of viatical settlements and assist you in determining if this avenue aligns with your needs.

Take a significant stride towards unraveling the potential of your policy today!

What is a Viatical Settlement?

A viatical settlement is a specific type of life settlement involving individuals suffering from a terminal illness. The transaction is usually made tax-free by the IRS, as long as the insured meets specific criteria stated by a medical professional.

A viatical settlement is a legal and viable option for individuals suffering from a terminal illness to sell their life insurance policy for an amount that is more than the cash surrender value but less than the claim amount.

In exchange for transferring ownership, the insured receives a cash settlement that can often be four times greater than the cash surrender value.

A viatical settlement is not a loan; it is a one-time cash transaction that results in a complete transfer of ownership in exchange for a lump sum. The money belongs entirely to the policy seller and can be spent at his or her discretion. Viatical settlements can also be in the form of a paid-up death benefit.

TERMS TO KNOW:

Life Settlement – Transferring a life insurance policy from a policyholder to a third-party buyer for a cash payout.

Cash Surrender Value – The amount of money a policyholder receives if they cancel a policy. The total amount received is the policy’s cash value minus fees associated with policy cancellation.

Death Benefit – The money a beneficiary (or beneficiaries) receives upon the death of the person insured on the policy.

Qualifying for a Viatical Settlement

Viatical settlement eligibility hinges on the policyholder being either terminally ill or afflicted by chronic illness, with a life expectancy of under two years. A wide array of policy types, encompassing even term life policies, can be eligible for viatical settlements.

On average, a life insurance sale yields 4-6 times the policy's cash surrender value. At Pivotal, our commitment extends further, with an average payout of 6-8 times the cash surrender value of your life insurance policy.

As a direct purchaser, Pivotal has meticulously designed an expedited process, facilitating swift policy sales by eliminating intermediaries. This ensures a faster process and higher payouts for you.

Optimal Timing for Pursuing a Viatical Settlement

For those confronted with a terminal illness, embarking on a viatical sale can prove to be a robust financial recourse. This avenue could potentially defray a significant portion, if not all, of your medical care-related expenses, spanning travel, accommodation, and actual medical costs. A multitude of compelling reasons may prompt consideration of a viatical settlement:

FINANCIAL CONSTRAINTS ON PREMIUM PAYMENTS

Alterations in policy terms, coupled with shifts in the insurance landscape and subpar policy performance, might lead to escalated premium payment obligations. Alternatively, unforeseen financial challenges—such as mounting medical bills, legal entanglements, assisted living expenditures, or tax burdens—may strain your budget.

MEDICAL CARE OR VARIOUS EXPENSES REQUIRE FUNDING

Navigating a medical crisis while grappling with looming medical bills contradicts the pursuit of palliative care and hospice goals. Escalating healthcare expenses pose a challenge, even for those equipped with robust health insurance. Viatical settlements offer an inflow of funds that can alleviate bill burdens or underwrite experimental/alternative treatments not encompassed by insurance coverage.

AMPLIFYING QUALITY OF LIFE

Patients and their families stand to gain funds for medical care or endeavors that enhance their quality of life. It's common to witness individuals utilizing these funds to realize cherished aspirations from their "bucket lists." Additionally, many policyholders derive satisfaction from witnessing their families relishing the life insurance funds, ensuring shared happiness while they're still present.

Should you grapple with medical debt, wrestle with premium obligations, or yearn for immediate financial infusion, a viatical settlement could be an appropriate choice. However, we at Pivotal emphasize prudent deliberation. 

Anyone contemplating a settlement should meticulously assess their life insurance and financial status, ensuring a well-informed decision that aligns with their and their family's welfare. If an urgent lump sum isn't imperative, we recommend refraining from pursuing a life settlement, considering that the ultimate payout is realistically the death benefit.

Exploring Diverse Life Settlement Choices

Embark on a journey of financial enhancement with three distinct life settlement choices: traditional, hybrid, and retained benefit. Each option is tailored to align seamlessly with the unique requirements of you and your family.

Traditional

Opt for the conventional approach by selling your entire life insurance policy for a lump sum amount surpassing the policy's surrender value.

Bid farewell to any future policy obligations or premium payments as the buyer assumes these responsibilities.

• Immediate Cash Infusion
• Release from Future Premiums

Retained Benefit

Embrace the retained benefit path, relieving you of premium payments while maintaining a portion of your benefit.

Upon policy culmination, beneficiaries are assured a predetermined percentage, with no additional financial commitments on your part.

• Assured Percentage
• Relief from Future Payments

Hybrid

Experience the hybrid avenue, merging two facets into a harmonious solution. Partial sale of your life insurance policy empowers you to receive an upfront cash infusion.

As the policy approaches its conclusion, your beneficiary secures a guaranteed percentage of the benefit, and you are freed from future premium obligations.

• Guaranteed Percentage
• Immediate Cash Injection
• Release from Future Premiums

Determining the Value from Selling Your Life Insurance Policy

Every situation is unique, and a universal valuation isn't applicable. We approach each case with personalized attention, ensuring absolute confidentiality and sensitivity, recognizing that tailoring your options necessitates a comprehensive understanding of your individual circumstances:

• Policy Category
• Policy Face Amount
• Age
• Health Condition

For a precise appraisal of your policy's value, we encourage you to promptly utilize our calculator for an estimate or reach out to us at XXX-XXX-XXXX for further insights.

Viatical Settlement Journey

Pivotal, as your direct purchaser, has meticulously fashioned an expedited process aimed at swift policy sales while eliminating intermediaries, thus ensuring you receive optimal compensation. The viatical settlement journey, orchestrated by Pivotal, navigates eight straightforward steps:

1. INITIATING THE DECISION

Prior to committing to a policy sale, it's crucial for both the policyholder and beneficiaries to embark on a conscious exploration. This entails engaging your financial advisor or the Pivotal team and exploring various avenues to ascertain the most advantageous solution.

You are under no obligation to accept any offer at this stage.

2. EVALUATING SUITABILITY

Viatical eligibility pivots on specific factors, encompassing premium details, the insured's life expectancy, and the policy's death benefit. An in-house medical underwriter, employing medical records, harnesses the disclosed information to calculate the insured's life expectancy and assess the policy's valuation, all at no expense to you. 

3. THE OFFER

Subsequently, Pivotal, or the designated buyer, extends an offer to the policyholder. This proposition exceeds the policy's price yet falls below the net death benefit. The selected buyer must hold a valid license in the policyholder's state of residence.

4. CONFIRMING APPROVAL

Upon evaluating the licensed buyer's offer, if deemed satisfactory by the policy seller, they may opt to accept the proposal and initiate the documentation review process.

5. CONTRACTUAL COMMITMENT

This juncture sees the licensed buyer generating state-sanctioned contractual documents.

These legal instruments serve to record the viatical settlement transaction, delineating the accord between the seller and purchaser. Both parties engage in signing and notarizing the contracts.

6. THOROUGH VERIFICATION

Following contract execution and submission of all required supporting documents, the validation procedure commences. Often delegated to a third-party entity such as a law firm, this validation agent ensures precise completion of contracting forms. Additionally, they assess the policy's active status and good standing with the insurance provider.

Verification encompasses confirming the presence of funds earmarked for the policy purchase within an escrow account.

7. OWNERSHIP TRANSITION

Subsequent to this, we initiate a formal ownership alteration request to the insurance carrier. This procedural step guarantees seamless transition from the incumbent policyholder to the designated buyer or the financing entity appointed by the buyer.

8. SEAMLESS FUNDS TRANSFER

With insurance carrier validation of the buyer's ownership status, the escrow agent receives authorization to release funds to the policy seller. The new owner assumes responsibility for premium payments, while the seller receives the transaction payment.

This finalizes the process, concluding the transaction, and affording the insured the autonomy to allocate the received funds at their discretion.

In the past decade, the landscape has witnessed a remarkable surge in effective regulations. Rather than a nationwide framework, the life settlement market is intricately governed on a state-by-state level. 

Hence, the onus lies with each state's government to diligently oversee the ethical conduct of entities. Rigorous measures are adopted by the majority of states, necessitating explicit licensing and stringent supervision to safeguard customer well-being. 

Pivotal takes pride in affirming our licensure for life and viatical settlements across numerous states, solidifying our commitment to compliance and customer protection.

Typically, the IRS deems the transaction as tax-exempt provided the insured satisfies specific conditions, often necessitating validation from a medical expert, commonly a physician, certifying the terminal diagnosis.

For comprehensive insights into the taxation of life insurance proceeds, refer to the IRS.

When you're prepared to embark on the journey of understanding how to sell your policy, your first step is to explore the Pivotal Settlement Calculator.

Within 24 hours of reaching out, Pivotal extends an initial, no-obligation offer, provided you meet the eligibility criteria for selling your policy.

Pivotal Life Capital operates under full licensure, and our client-centric ethos guides our approach. We place paramount importance on your needs as the policy owner. Should you require assistance in facilitating this transition, please don't hesitate to inform us. We're dedicated to being of service.

Having facilitated over $1 Billion in placed assets, our offers typically exceed the surrender value of a standard policy by about six times.

Our commitment is unwavering: we empower policy owners with unbiased insights, enabling them to make informed decisions regarding their insurance policies.