What is the difference between a viatical and a life settlement or senior settlement?
Viatical settlements (or life insurance policies with a “living benefit rider”) specifically involve a policyholder with a terminal illness who wishes to sell his life insurance policy for immediate cash and needs the money for medications or treatment; the seller typically has a life expectancy of five years or less. Life settlements involve policyholders, often seniors or high-net-worth policy owners age 65 or older, who are not gravely ill but who have impaired health. A life settlement is typically the sale of an existing life insurance policy for more than its cash surrender value (if there is one) but less than its net death benefit.
