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  • Archive for the ‘Viaticals’ Category

    Find Out More: Viaticals Resource Guide

    Wednesday, February 25th, 2009

    This week, we chatted with WISER Senior Policy Analyst Laurel Beedon about Viaticals. If you still have questions on viaticals or you’re just looking for more information, here’s WISER’s list of Viaticals resources:

    American Council on Life Insurance
    1001 Pennsylvania Avenue, N.W.
    Washington, DC 20004-2599
    www.acli.org

    National Association of Insurance Commissioners
    444 North Capitol Street, N.W.
    Washington, DC 20001
    www.naic.org

    National Association of People with AIDS
    1413 K Street, N.W.
    Washington, DC 20005
    www.napwa.org

    National Viatical Association
    1200 G Street, N.W., Suite 760
    Washington, DC 20005
    www.nationalviatical.org

    For more information, you can also contact your state insurance commissioner or state attorney general. The National Association of Insurance Commissioners has state-by-state contact information for insurance commissioners here.

    Q&A: Viaticals

    Tuesday, February 24th, 2009

    This week, the WISER blog writers had a Q&A session with WISER’s Senior Policy Analyst, Laurel Beedon, on Viaticals. A viatical is a legal document that sells your life insurance policy to a third party.

    Q:Why would I sell my life insurance?
    A: A viatical can provide needed money if you are terminally or chronically ill and in a difficult financial situation.

    Q: Who is involved?
    A: You, as a terminally or chronically ill person sell your life insurance policy to an investor in return for a lump-sum payment. The investor then takes over payments on the policy and is the beneficiary of the policy upon your death. Usually, a viatical broker arranges the agreement between you, the seller of the policy, and the buyer using a viatical purchase agreement. The broker is paid a commission.

    Q: What should I find out?
    A: If you are considering a viatical, it is important to ask some questions and learn about all the options on your life insurance policy before you make your decision.

    Here are some questions to ask and people to check with before you decide on a viatical:

    • Do you have any cash value in your life insurance policy? If so, you may be able to use some of the cash value to meet your immediate needs and still keep your policy in force for your beneficiaries without having to sell it to a third party.
    • Does your life insurance carrier offer accelerated death benefits? Those benefits could pay you a substantial portion of your policy’s death benefit and you wouldn’t have to sell your policy to a third party.
    • Will your receipt of cash from a viatical agreement be taxed? Check with your financial or tax advisor.
    • Will you lose any public assistance or social service benefits such as food stamps or Medicaid if you receive a cash settlement?
    • Will buyers of your policy be able to learn your identity and will they know certain medical and personal information about you, such as your address and life expectancy?

    Before you make any major decisions, you may also want to consult your own financial advisor or attorney. Shop around. Talk with several companies and/or brokers to find the best arrangement. Don’t fall for high pressure tactics. You don’t have to accept an offer, and you can change your mind. Check with your state insurance department to verify the company or broker you are considering is licensed. Check with your state attorney general’s office for complaints against the company.

    Tomorrow: Find Out More: Viaticals Resource Guide

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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