There also may be a service charge. In addition, you may consider selling your life insurance policy to a viatical settlement company, a private enterprise that offers a terminally ill person a percentage of the policy's face value. It is not considered an insurance company. The viatical settlement company becomes the sole beneficiary of the policy in consideration for delivering a cash payment to the policyholder and paying the premiums. When the policyholder dies, the viatical settlement company collects the face value of the policy.
Viatical settlements are complex legal and financial transactions.
They require time and attention from physicians, life insurance companies, lawyers, and accountants or financial planners. The entire transfer process can take up to four months to complete. Each viatical settlement company sets its own rules for determining which life insurance policies it will buy. Some companies require a life expectancy of two years or less, while others may buy your policy even if your life expectancy is four years. If your life insurance policy is provided by your employer, purchasers will want to know if it can be converted into an individual policy or otherwise be guaranteed to remain in force before it can be assigned.