Viaticals A Viatical Settlement Contract is the sale and transfer of the legal right to the death benefits of a life insurance policy through an irrevocable beneficiary designation. This is done by a terminally ill individual, or viator, with a third party investor prior to the viator's demise. The death benefits are payable upon policy maturity to the investor. Simply put, viaticals allow you to collect now on a life insurance policy to help deal with the costly medical expenses you are facing. Unfortunately we live in a world where terminal illnesses are still with us.
Terminal illness drains resources.
The proceeds from the Viatical Settlement may pay for medical expenses that health insurance will not cover. Many viators have run out of health benefits and need money to pay for standard medical treatment of symptoms. Others are unable to meet their daily living expenses. On August 21,1996 President Clinton signed the Health Insurance Portability and Accountability Act. This Act includes language making proceeds from a viatical settlement federally tax free as of December 31, 1996.