How do accelerated benefits compare to “viatical settlements”?
Some terminally ill people have made what is known as a “viatical settlement” of their life insurance policy — an arrangement that should not be confused with accelerated benefits. In a viatical settlement, a company buys the terminally ill policyholder’s life insurance policy, paying the policyholder 55 to 80 percent, typically, of the death benefit. The viatical company becomes the policy’s beneficiary, and receives the full death benefit when the insured person dies.
