What Is Viatical Life Insurance? 
There is actually not a type of life insurance call Viatical Life Insurance , but life insurance is purchased from the policy owner as part of a `` viatical settlement '' , or `` life settlement '' . In order to sell one 's policy as part of a viatical settlement , the policy must have cash value and the insured person must have a decreased life expectancy . The purpose is to provide the insured with cash while still alive , while the entities who are buying the policy are banking on making more from the death benefit than what they paid for the policy . Most new cash value policies now ask whether the policy is being taken out for the purpose of being sold , because this defeats and misrepresents the purpose of life insurance . For those with existing policies who find themselves with a severe or terminal illness , and insurance rich and cash poor , a viatical might be a benefit . But you must be very careful and look at every angle before going down that road . 