Are There Limits on How You Spend a Viatical Settlement?

What are the benefits of a viatical settlement?

You will receive a single deposit of cash from your viatical settlements, and you don’t have to pay income tax on the deposit of cash you receive.

You can reduce your monthly expenses with a viatical settlement because the buyer adopts the responsibility of paying any monthly premiums still owed on the policy. This can prevent the possible loss of coverage if you can’t afford your policy payments. Viatical settlements also pay more than the cash value of your life insurance plan if you opt to contact your insurance company and cash in your policy.

Do viatical settlements have to be used to pay medical bills or other debts?

You can opt to use the funds to pay for medical care. A viatical settlement can provide you with the financial means to pay for treatment your insurance doesn’t cover, or it can pay for help from a home health aide who helps you perform activities of daily living. A home health aide’s services may be essential if you’re living with some level of disability or a severe cognitive impairment.

You could use part of your viatical settlements to pay every lender you owe money to in order to protect your family from the claims of creditors after you pass away. A financial planner can help you determine the best way to maximize the deposit of cash you receive. You may also select to prepay for your funeral and make your final arrangements to prevent your spouse from assuming this responsibility after you pass away.

Viatical settlement funds can also be used for personal indulgences. You can Google “tattoo removal Austin TX” to find tattoo removal specialists who can remove an unwanted tattoo. You may have had something from a motion picture tattooed on your body or something that’s lost significance due to the end of a relationship. Tattoo removal specialists will offer you a free estimate and explain the procedure to ensure you can make an informed decision.

Ultimately, you’re free to use the money you receive from your viatical settlement without limitations or restrictions. Perhaps you’ll purchase a dream home that you can enjoy in the time you have left and leave to your family. You could also opt to create trust funds for minor children to ensure they can afford to go to college. Whether you have children or not, you may decide the best thing to do with your money and your remaining time is to create memories. You could pack your bags and take your family on a dream vacation, or you could create a bucket list and fulfill as many lifelong dreams as possible.

How can you know if a viatical settlement is right for you?

Although a viatical settlements will offer you quick access to a lump sum of cash, you may prefer to retain your life insurance policy. A viatical settlement may not offer an economic benefit if you don’t need the funds. Although viatical settlements pay more than the cash-in value of your life insurance policy, they pay less than the expected death benefit. You may feel it’s best to retain the policy to ensure your beneficiary receives the full policy value. If you’re chronically ill but expected to live more than two years, you could also opt to obtain a life settlement through a broker. Life settlements don’t pay as much as viatical settlements, but there are no medical requirements that must be met to qualify.

Viatical settlement funds are tax-free, unrestricted funds you can use in any way you see fit. While some people need the funds to pay for their living expenses or medical care, others may opt to pursue a viatical settlement to access the money they need to fulfill lifelong dreams. Viatical settlements can be a great way to access a lump sum of cash if you’re chronically or terminally ill.