There can be many reasons why someone may want to cash in on their life insurance policy, especially if they are facing medical or nursing home bills. There are many companies out there that offer what are called viatical settlements. A viatical settlement is a buyout of a life insurance policy for a lump sum or monthly payments – you sell a company the right to collect your life insurance proceeds when you die in exchange for a monetary settlement immediately.
Before considering a viatical settlement, you should speak to a New York estate attorney about the impact this would have on your estate plan.
There can be some pros to getting a viatical settlement if there is a chance of getting a large amount of money which would end up vastly improving quality of life or could even help pay for life-saving treatment. Having an influx of cash in such a situation could be extremely helpful, as long as the consequences are understood.
With a viatical settlement, the beneficiary that you originally wanted to get an insurance payout would no longer get those proceeds. This can cause issues when it comes to paying for your final expenses and could cause your heirs to have to get whatever is left of the life insurance payout through surrogate’s court, when it would have just gone directly to them before.
There is also an issue of are you and your family getting a fair deal. If you have a policy worth $1,000,000 and sell it, you could only get a small percentage of that amount if the company buying the policy determines that they would not get an adequate profit for it. This could mean a significant financial loss for your heirs.
When considering a viatical settlement, it is best to contact a New York City estate attorney before doing anything to determine what kind of impact it may have on your estate plan. It may be possible that you simply need the money. But you want to make sure that you are well informed about your decision and what kind of impact it will have on your heirs after you die.
In addition to this, if you decide that you are going to go forward with a viatical settlement, you want to be sure that you understand all of the terms that are being offered to you by the company buying the policy. Therefore, you should also hire a New York estate attorney to assist you with the decision and help you make sure that you are treated fairly and are not taken advantage of. Call the Law Offices of Albert Goodwin at 718-509-9774.