What is a viatical settlement?

Published April 22, 2015

A viatical settlement is when a third party buys the life insurance policy of someone who is terminally or chronically ill, or nearing the end of her life. It's similar to a life settlement, except that the cash paid may be free from taxes under certain circumstances, for example, if it's used to pay for medical and end-of-life expenses within a certain period of time.

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