What is viatical fraud?
Similarly, it is asked, what does viatical mean?
A viatical settlement is an arrangement in which someone with a terminal disease sells his or her life insurance policy at a discount from its face value for ready cash. The buyer cashes in the full amount of the policy when the original owner dies. A viatical settlement is also referred to as a life settlement.
Likewise, what is a viatical policy? A viatical settlement (from the Latin "viaticum") is the sale of a policy owner's existing life insurance policy to a third party for more than its cash surrender value, but less than its net death benefit. Such a sale provides the policy owner with a lump sum.
Beside above, what happens under a viatical settlement?
Viatical settlements allow life insurance policyholders to sell their policies to investors for an immediate cash benefit. In return, the buyer of the viatical settlement becomes the new owner of the life insurance policy, pays future premiums and collects the death benefit when the insured dies.
How much do viatical settlements pay?
In general, the larger the life insurance policy size, the larger the life settlement offer. This is because the death benefit payout to the investor is larger. So an average life settlement offer on a $100,000 policy may be around $20,000 and an average offer on a $1,000,000 may be around $200,000.