A viatical settlement involves the selling of a life insurance policy to unrelated investors by a terminally ill person. These investors can be individuals, private funding companies, or brokers. The policy is purchased at a reduced rate based on the face value of the policy. The investor pays a lump sum amount of cash to the seller and on the person' demise, the investor collects the death benefits. Grim as this may sound, if the transactions take place in a fair manner, the viatical settlements can provide relief to the terminally ill person in terms of easing the financial stress associated with paying for health care costs associated with a terminal disease.

Viatical settlement providers are the investors who buy the life insurance policies. The New York State law mandates that these providers be licensed. If you are looking for a potential buyer of the life insurance policy, you should be sure to check the license of the company or the broker. It also makes more sense to sell the policy to the purchaser directly rather than through a broker, because the broker may or may not keep your best interests in mind when putting together the deal. Everyone has a tendency to act in their own best interest, and viatical brokers are no exception. The broker usually get a percentage of the death benefits from the purchaser of the viatical settlement. Thus, the better deal that the investor gets, the better commission the broker will likely receive.

The best way to find the top offer for your life insurance policy is the same way as finding the best price on a new car: shop around. If you disclose the fact to investors that you are shopping for the best offer, they will more than likely give your their top offer first, rather than try to get you to accept a lower-than-fair offer.

In addition, you must keep in mind that you ought to receive the full cash payment at the time of sale. Don't ever agree to partial payments or payments on installments. Your viatical settlement payment should exceed the cash value of your whole life insurance policy. If not, the better option would be to surrender your policy for its cash value. This does not apply to term-life policies.

You must check with your insurer if the policy contains provisions for accelerated death benefits. Before selling out, you can also consider options such as reverse mortgages. Most of all, do not give in to pressure tactics. It is your responsibility to bargain for the best possible rates. Only then will you receive the highest viatical settlement.