Many seniors are finding that a senior life settlement offers them the opportunity to sell their unwanted life insurance policies for more money than they would be able to receive by surrendering the policy to their insurance company. Senior life settlements, also known as life settlements through Amrita Financial put the policy holder in direct control of who they sell their policy to and how much money they receive for it instead of relying on insurance brokers or policy auction sites.

Life settlements are commonly called senior settlements because a high percentage of the people who sell their life insurance policies are senior citizens. When faced with high medical bills and other mounting expenses, particularly while on a fixed income, continuing to make premium payments on an insurance policy that is no longer needed or wanted simply does not make smart financial sense.

Amrita Financial Can Help

A senior settlement can be the answer to your financial difficulties, and at Amrita Financial, we give all of our valued customers full access to our online tools and resources, as well as the ability to access the bid status on your policy, accept or reject offers, and start the sales escrow process, 24 hours a day, 7 days a week. We understand that seniors today are faced with many important decisions to make in regards to finances, and we know that the decision to sell a life insurance policy can have an enormous impact on your financial future. That's why we are here to help you. We are more than just insurance brokers, we are an experienced senior settlement company offering the tools, knowledge, and expert advice that you need to help make a sound senior settlement decision.

Don't wait another minute—Contact us today to learn more about your senior settlement options.

Viatical Fraud committed by a few has unfortunately given the viatical and life settlement industry a big black eye. Much legislation and discussion has been devoted to the topic of viatical fraud. As a result, the incidence of viatical settlement fraud has diminished tremendously, but people should always be aware.

Viatical Fraud Rarely Affects Policy Sellers

Viatical fraud comes in several flavors which are perpetrated against consumers, life settlement providers and viatical providers and investors. However, viatical settlement fraud rarely if ever, affects life settlement policy sellers with an existing policy. The reason policy sellers are insulated from viatical fraud is inherent in the life settlement or viatical process. If a person sells their policy, the policy change occurs in an escrow account. Therefore, the policy seller is protected from viatical settlement fraud since the escrow account is funded with sale proceeds before the policy is released to the buyer.

STOLI’s Are The Most Notable Viatical Fraud

Viatical fraud has mainly centered around STOLI’s or “Stranger Originated Life Insurance”. This type of viatical fraud is also called no premium life insurance. This occurs when someone with no insurable interest takes out a life insurance policy out on a senior they don’t know, with the hope of selling it later for a profit. The reason this is considered viatical settlement fraud is that when the senior sells the policy in a life settlement they are responsible for the taxes, while the person responsible for the whole thing transaction is usually long gone with the life settlement proceeds.  

Clean Sheeting Viatical Fraud by Policy Sellers

Viatical fraud can certainly be committed by knowing policy sellers. One form of viatical fraud is “clean sheeting”, when a prospective insured misrepresents their poor health as good. This is done to in turn qualify for a new life insurance policy. That life insurance policy is then sold in a life settlement. However, it is considered a form of viatical fraud since the life insurance policy was issued under false pretenses.

Dirty Sheeting Viatical Fraud by Policy Sellers

Viatical fraud can also occur by a healthy individual in a viatical settlement. In the past, some insureds would falsely claim poor health or medical conditions that didn’t exist. The goal of this “dirty sheeting” viatical settlement fraud is to generate interest and maximize offers from viatical settlement provider that might not otherwise offer or offer as much for a life insurance policy.

Viatical Settlement Fraud of Investors

Viatical settlement fraud also is committed against life settlement investors. This occurs more with small groups of investors than with large financial institutions buying life insurance policies. Investors in viaticals and life settlements must always beware and reduce their risk by investing in a name or organization they trust. Life Expectancy fraud is one of the more common viatical fraud schemes against investors. This occurs when an investor is told or presented with a falsified and shortened life expectancy certificate of a potential insured. In addition, some viatical settlement fraud occurs when a viatical or life settlement provider does not have the proper regulatory authorization or licensing to solicit life settlement or viatical investors. Finally, some viatical settlement fraud has occurred as Ponzi schemes. Whereby, the investors are paid with other investor money rather than life settlement investments.

Viatical Settlement Companies defined

Viatical settlement companies are defined by some states as: A viatical or life settlement provider is defined as a person, other than a viator, life settlor, or owner of an individual policy or certificate holder under a group policy insuring the life of a viator or life settlor, who enters into a viatical or life settlement with a viator or life settlor and owner or certificate holder, or who attempts to do so through negotiation, solicitation, or acquisition of confidential information from or about a viator, life settlor, or owner. What that means is Viatical companies are for profit organizations that purchase life insurance policies that insure terminally ill people. Viatical settlement companies benefit the policy seller, who is typically the same person as the insured, by providing immediate cash before the insured dies. Viatical settlement companies in turn profit by receiving the full death benefit of the life insurance policy when the insured eventually dies. Why would a viatical settlement company buy an existing life insurance policy? The viatical company agrees to pay the insured a lump sum and pay the ongoing life insurance premiums to keep the policy in force. The viatical company will make a profit if the amount they spend to buy the policy plus the ongoing premium expense is less than the death benefit of the life insurance policy. Essentially viatical companies are investing money into a life insurance policy at a discount. Then the viatical settlement companies realize a profit when the policy matures or pays the death benefit. To the viatical company it is a smart business investment. To the insured that gets paid by the viatical settlement company it is a much needed financial life line. Viatical settlement companies help insured when they desperately need it most.

Viatical Settlement Companies Can Help.

Viatical companies play an important and crucial role for people who are terminally ill. Viatical settlement companies provide access to money for terminally ill patients. Terminally ill patients are most likely experiencing more expenses than at any other time in their lives. While at the same time, without a viatical settlement company they are in the worst position to generate income. This is why viatical settlement companies are so important.

What Role Does a Viatical Settlement Company Play?

This is because treating a terminal illness can be very, very expensive. In many cases, patients try experimental medicine that is not covered by insurance. In addition, the cost of treating terminal illness can exceed limits of health insurance policies. Also, some terminal illnesses necessitate around the clock care givers to assist patients, which is not always covered by insurance. Furthermore, viatical companies offer money for much needed living expenses. When someone is terminally ill they often can not continue to work and they no longer generate income. A viatical company is there to help find money for these stressful and important expenses. Unfortunately, many people donÔÇÖt know that viatical settlement companies are available t help. If they do, they often donÔÇÖt know where to find and engage with viatical companies.

Why Should I Use a Viatical Settlement Company?

One alternative to selling a life insurance policy to a viatical company is to use the accelerated death benefits of a life insurance policy. Accelerated death benefits allow a portion of a policyÔÇÖs death benefit to be accessed prior to an insuredÔÇÖs death. However, accelerated death benefits do have some trade offs compared to working with viatical companies. First, not all policies have an accelerated death benefit provision. However, viatical settlement companies will review all life insurance policies of a terminally ill insured. Secondly, the accelerated death benefits have some important stipulations. They are normally restricted to certain types of illness or diseases. While viatical companies will consider buying policies for terminally ill patients regardless of their particular illness or disease. Thirdly, accelerated death benefits dictate how much money can be accessed by an insured while still living. While a policy seller can negotiate with a viatical company or several viatical companies to find the best offer. If they donÔÇÖtÔÇÖ like the amount being offered to purchase their policy they can refuse to sell it to a viatical settlement company. In contrast, a positive aspect of accelerated death benefits is that beneficiaries will still receive a portion of the death benefit after the insured dies. This is untrue of working with viatical settlement companies after money has been received. Although, it is important to remember that accelerated death benefits are deducted from the death benefits so the amount received by beneficiaries will be greatly reduced. This is different from working with a viatical company. When a policy is sold to a viatical settlement company the original beneficiaries receive nothing. As part of the sale, the viatical company replaces the beneficiary on the policy. Viatical companies make their money by collecting the death benefit when the insured dies.

What are the Alternatives to a Viatical Company?

It is wise to know all of your options before making any decisions about accessing the accelerated death benefits or selling a policy to a viatical company. Be sure to evaluate the availability of accelerated death benefits and their financial implications compared to working with viatical companies. If the decision is made to sell a life insurance policy, it is best to discuss a viatical with several viatical companies. Have each viatical company make an offer and compare all of the offers. Then select the viatical company that makes the most financial sense and you are most comfortable working with. Facing difficult decisions while experiencing a terminal illness is hard enough. Working with viatical settlement companies and ultimately choosing a viatical settlement company to buy your life insurance policy shouldnÔÇÖt be.

Selecting Viatical Settlement Company

A viatical settlement company is there to help, but viatical settlement companies are not all the same. Although the viatical settlement company industry is not very large, there are many viatical companies available to purchase policies. The first step is to find a viatical settlement licensed in your state. Each state maintains a list of the viatical companies licensed to do business in their respective state. From there you can contact each viatical settlement company or work with a broker who has relationships with many viatical companies. Feeling comfortable with the arrangement and the viatical settlement company is paramount to having a successful viatical transaction.

A Viatical settlement broker is someone who negotiates a viatical settlement on behalf of a life insurance policy owner. Viatical brokers work with a number of viatical providers, which is another term for the financial institutions that buy these policies, to find the best price for their clientÔÇÖs insurance policy. Viatical brokers essentially facilitate the sale of an existing life insurance policy which is insuring someone who is terminally ill. Some states provide the following definition of a viatical broker: A viatical broker is defined as person who is not a viatical or life settlement provider representative, and who for a commission or other form of compensation, or with the intent of obtaining such compensation.

Viatical Settlement Broker and Life Settlement Broker ÔÇô WhatÔÇÖs the Difference?

Viatical settlement brokers and life settlement brokers are terms that are often used interchangeably. In fact, some people use the term viatical life settlement broker to describe an individual that facilitates the sale of an existing life insurance policy. However, there is a distinct difference between a viatical settlement and a life settlement and thus a distinction between a viatical settlement broker and a life settlement broker. Viatical brokers are brokers that deal with viatical policies. In other words, the sale of an existing life insurance policy for an insured that is terminally ill. However, often a viatical settlement broker will also act as a life settlement broker. They are different, but not mutually exclusive.

Viatical Settlement Broker ÔÇô Licensing?

Viatical brokers are regulated by almost every state in the USA. In order to participate in the sale of these a terminally ill insuredÔÇÖs policy, viatical settlement brokers licensing is required. The licensing is quite stringent as the sale of a viatical policy is a sensitive matter requiring expertise, sense of urgency and compassion. Some states such as New York and California do not regulate life settlements, but do regulate individuals acting as a viatical broker. Since the viatical settlement broker field is so specialized and requires a great deal of expertise, the viatical broker license can be quote costly. For example, the application fee to obtain a viatical settlement brokers license is $3000. The requirements are so strict and the cost so prohibitive that there are less than 20 issued licenses for a viatical settlement broker in the state of California. The amount of viatical settlement providers number less than 10 in California.

Viatical Settlement Broker - What are the alternatives?

Viatical brokers are not the only option for someone who is terminally ill seeking money for medical and living expenses. Those with serious health conditions or who are terminally ill should also consider accelerated death benefits. Some life insurance policies allow for a portion of the death benefit to be advanced prior to an insuredÔÇÖs death. This may or may not be advantageous over selling a policy through a viatical life settlement broker.

History of Viatical Settlement Broker Industry

Viatical brokers arose from a need to help terminally ill patients sell their existing life insurance policy in order to fund medical and living expenses. This really emerged during the 1980ÔÇÖs when the AIDS epidemic came to the forefront of our nation. AIDS patients faced costly medical expenses as doctors tried a wide variety of treatments. A large number of medicines while unproven were expensive and sometimes not covered by insurance. In addition, AIDS patients became very ill and were often unable to work. Therefore they needed money for living expenses in addition to medical bills. Selling their policies through viatical brokers proved to be an ideal opportunity to access large amounts of cash while theoretically not giving up anything they needed at the time. Viatical settlement brokers entered the market to facilitate the transaction and provide access to a number of buyers who would compete for the policy. As the treatment of AIDS improved and the viatical industry reached its maturity point, viatical brokers looked to healthy seniors for additional sources of life insurance policies to sell. Hence, many viatical settlement brokers are now also life settlement brokers. Which is why some states donÔÇÖt differentiate between a viatical settlement broker and a life settlement broker in their legislation or regulatory treatment.

Viatical Definition

The common viatical definition is; the sale of an existing life insurance policy that is insuring a terminally ill person in exchange for an immediate cash payment. Typically a viatical definition is predicated upon the health of an insured. The health of the insured determines if the sale of a life insurance policy is called a life settlement or meets the viatical definition. When referring to an accepted viatical definition, the person insured by the policy must be terminally ill. The viatical definition gained traction in the 1980ÔÇÖs. It was then that AIDS patients sought money for medical and living expenses. They sold their life insurance policies to investors. The AIDS patients were happy to get much needed money, while the investors viewed the arrangement as a low risk investment in which they would get paid upon the insuredÔÇÖs death. With that the viatical industry and viatical definition as we now know them were born.

How is the definition of viatical different from state to state?

The definition of viatical is clearly the sale of a life insurance policy covering a terminally ill patient for an immediate cash payment. Most people agree that the phrase terminally ill means; to have an incurable illness or disease that will result in death in the near future. However, the length of time that phrase refers to is not universally agreed upon. This is evidenced by the language employed by various states when discussing the definition of viatical. For the definition of viatical in California, a viatical is stated as involving the sale of an insurance policy of insureds with 23 months or less to live. In Texas, the definition of viatical is broad enough to include anyone with a 48 month life expectancy or less. While Washington state insurance regulations provide the definition of viatical to include anyone with a terminal illness, but donÔÇÖt define the life expectancy or definition of terminal illness. So the viatical definition is in general the same across the country. Although the definition of terminally ill which is an integral part of the definition of viatical is not.

Viatical Expert

Using a viatical expert is highly suggested when selling an insurance policy in a viatical transaction. The viatical expert should be a viatical broker, licensed to transact viatical settlements in the state of residence of the policy seller. Having a viatical expert on your side during these transactions is extremely important. First, they have access to a large number of viatical settlement companies that purchase viatical policies. In order to gain the highest offer for a policy, the maximum number of companies should be engaged in the bidding process. In addition, a viatical expert will be able to help a policy seller, also known as a viator, navigate the paperwork and documentation requirements of a viatical. Most importantly, having a viatical expert on your side reduces mistakes and speeds up the viatical process. The viatical definition and context of terminal illness conveys a sense of urgency. So finding a speedy, yet top dollar viatical settlement offer is very important and having a licensed viatical expert will help you achieve this. For more information on working with a viatical expert, please contact us at (888) 539-8885.

Cash surrender value is the amount that an insurance company will pay a policy owner to surrender or turn in their unwanted life insurance policy. Cash surrender value of life insurance is essentially the amount an insurer will pay for someone to ÔÇ£walk away from a life insurance policy" they own and discontinue their insurance. This is an important concept to understand as it is one of the 3 options available to someone who no longer wants their life insurance policy. The other two options for unwanted life insurance policies are a life settlement or to simply let a policy lapse by not paying premiums.

Surrender Life Insurance Policy - Why would an insurance company do that?

Surrender Life Insurance Policy? Why would an insurance company allow their policy owners such an option? Life insurance companies generate revenue and in turn make a profit by collecting premiums from life insurance policy owners. Those premiums are then pooled together and invested by the life insurance company in things such as stocks, bonds, real estate, etc. to generate investment income for the insurance company. In addition, a portion of the life insurance premiums are used to run the insurance business and pay for things such as salaries, rent, insurance agent commissions and other normal business operating expenses. Finally, the premiums are used to pay life insurance claims to beneficiaries when an insured dies. If an insurance company can collect premiums or money for a life insurance policy that never results in a claim or payment of a death benefit, it will make more profit. It will have collected money, but never incurred the major expense of paying the full life insurance death benefit to a beneficiary. By offering the cash surrender value of life insurance, the insurance company is incentivizing the policy owner to forfeit the policy before the insured dies. Essentially the insurance company collects money and never has to pay the claim. The small cash surrender value offered by the insurance company is usually far less than the death benefit of a policy. Thus, the insurance companyÔÇÖs preference is always for a policy owner to return a policy for the minimal cash surrender value instead of the policy resulting in a much more costly claim. The life insurance company would prefer to pay a little bit of money now rather than a lot of money in the future.

Surrender life insurance policy ÔÇô What are the other options?

Surrender life insurance policy, a good option? Typically the cash surrender value is a very small percentage of a life insurance policyÔÇÖs death benefit amount. People who receive the cash surrender value of life insurance are said to get pennies on the dollar of a policyÔÇÖs true value. Surrender life insurance policy, how much will you get? In many cases, the amount received when surrendering life insurance may be the same or close to amount of cash value that has built up in a policy. In some cases an insurance company imposes fees to surrender life insurance policy. These fees vary, but are usually related to the length a policy has been in force. While the cash surrender value of life insurance is not much, it is certainly more than allowing a policy to lapse. When life insurance policies are allowed to lapse, the policy owner receives nothing. The only benefit is that the policy owner no longer pays premiums. So in that respect, the cash surrender value of a policy is better than nothing. In fact, almost 90% of Universal life insurance policies never result in a claim. Meaning the insurance company never has to pay beneficiaries in over 89% of the cases because the policy owner allowed the insurance to lapse or collected the cash surrender value.

Surrender Life Insurance Policy ÔÇô There Are Better Options

For those policy owners that take the cash surrender value of life insurance or let the policy lapse, they are missing out on an opportunity to get even more than through a life settlement. Life settlements are reported to pay 200%-500% more than the cash surrender value on average. The choices go beyond A) Surrender life insurance policy or B) Let it lapse. A life settlement provides a 3rd and in many cases more attractive option that may pay the policy owner more. By allowing potential buyers in a life settlement to bid on a policy, its true market value will be discovered. Then and only then, will a policy owner know if accepting the cash surrender value is the best option or if someone else is willing to pay them more than the insurance company will to surrender life insurance policy.

Surrender life insurance policy? If you are thinking about returning your policy to the insurance company, we encourage you to first try a free, instant life settlement appraisal.