viatical settlement


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Related to viatical settlement: Viatical Settlement Company

viatical settlement

n
(Insurance) the purchase by a charity of a life assurance policy owned by a person with only a short time to live, to enable that person to use the proceeds during his or her lifetime. See also death futures
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.viatical settlement - cash derived from sale of an insurance policy by a terminally ill policy holder
advance death benefit - a percentage of death benefits paid directly to policy holders having a short life expectancy (usually 6 months)
2.viatical settlement - sale of an insurance policy by a terminally ill policy holder
liquidation, settlement - termination of a business operation by using its assets to discharge its liabilities
References in periodicals archive ?
14, the NAIC Executive Committee had reinstated the Viatical Settlement Working Group.
A viatical settlement transaction may be the answer for these people.
The viatical settlement market became popular in the late 1980s due to the AIDS epidemic.
In contrast to an accelerated death benefit received under a life insurance policy, when a chronically or terminally ill insured sells his death benefit at a discount to a third party it is known as a life settlement or viatical settlement (see discussion, pages 461-462).
The viatical settlement business developed in the 1980s and 1990s as AIDS patients and other terminally ill patients sold their life insurance policies as a way to pay for their health care.
A viatical settlement enables someone facing a terminal illness to use the value of the life insurance policy prior to death to assist with the financial burdens of medical care, particularly if there is a loss of income during the final period.
Before making a final decision to make a viatical settlement to pay for your long-term-care needs, you may want to contact your state's attorney general's office or department of insurance.
According to an article in the July 31, 1992 issue of The Wall Street Journal, "the first viatical settlement company was started in 1989 by Robert Worley, Jr.
As the court explained, the act managed and controlled the relationship between insurer and insured, and did not address the relationship between viatical settlement providers and their investors.
Before life insurance companies offered accelerated benefits, entrepreneurs formed viatical settlement companies to provide accelerated payments to insureds.
Similarly, the IRS uses a 24-month time frame when determining whether the proceeds of a viatical settlement paid to an insured are exempt from taxation.
In "Actuarially Fair Prices and Minimum Price Floors," we develop a simple model relating the actuarially fair price of a viatical settlement transaction to the life expectancy of sellers.