A viatical settlement is the sale of an existing life insurance policy for more than its cash surrender value but less than its net death benefit. You are likely eligible for a viatical settlement if your life expectancy is 24 months or less. You may qualify with a longer life expectancy, depending on your circumstances.

Viatical settlements are regularly conducted in cases in which the insured person is fighting advanced liver disease, cancer, cardiovascular diseases, ALS (Lou Gehrig’s Disease), end-stage diabetes, or multiple conditions, including Alzheimer’s disease or Dementia.

For seniors (aged 70 or older) who are not necessarily facing catastrophic health challenges, a life settlement – a cousin of the viatical settlement – may be an option. Like a viatical settlement, it enables the sale of an existing life policy but is undertaken by seniors whose health situation is not necessarily catastrophic. In fact, relatively healthy seniors often transact life settlements for the purposes of estate- or financial planning.

The proceeds of a viatical settlement or life settlement can be used for anything, including direct healthcare expenses, paying bills, alternative treatments, or simply to maintain quality of life. Life settlements conducted for estate- or financial planning purposes often fund the purchase of another investment or financial product, including a newer “model” of life insurance.