viatical settlement

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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 ?
It allows those suffering from chronic and life-threatening illnesses to receive the proceeds of living benefits in the form of viatical settlements free of any Federal income taxes.
Some life insurance policy sales are known as viatical settlements. These usually take place when the seller has less than two years to live, as certified by a doctor, and the funds received are not subject to federal income tax.
The practice of buying and selling "viatical settlements" began in the late 1980s when a devastating medical AIDS epidemic presented a financial shock to thousands of previously healthy Americans (Stone and Zissu, 2006).
The NAIC passed the Viatical Settlements Model Act in 2007 and created protections against STOLI.
Chief among these are viatical settlements, essentially the parent of life settlements, from which the industry sprung in the late 1990s.
While there may be some justification for viatical settlements and closely related arrangements, the concept of selling policies to unrelated parties has been a made-to-order recipe for scams and abuses.
This may include offering new products and services to manage distributions, not simply accumulations; modeling draw-down plans; and understanding the wide range of income distribution methods, including annuities, equity from homes and businesses, and viatical settlements.
(39.) Section 12 of the NAIC Model Viatical Settlements Act contains "common control" provisions that are designed to prevent conflicts of interest, and their application to exchanges that enter into strategic partnerships with providers is unclear.
Viatical settlements. A viatical settlement is a sale of a life insurance policy by a terminally ill patient to investors.
Viatical settlements enable an insured to receive benefits, prior to death, to pay for the costs of care.