Why Viatical Settlements Matter for Cancer Patients and Their Families
Paying for Cancer doesn’t have to be hard. Many people are unaware that a life insurance policy can be a valuable resource for cancer care through a viatical settlement, a transaction that allows policyholders to sell their life insurance for an immediate cash payout.
Let’s explore viatical settlements in 2025, understand how they work, who qualifies, the benefits and risks, and how they compare to other cancer financial assistance options. If you or a loved one are struggling with the high cost of cancer treatment, understanding viatical settlements can help unlock much-needed financial relief.
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What Is a Viatical Settlement?
A viatical settlement is a financial arrangement where a person with a life-threatening illness, such as metastatic cancer, sells their life insurance policy to a third-party company for an immediate lump sum cash payout. The payout amount is higher than the cash surrender value but lower than the death benefit. In exchange, the buyer of the policy becomes the policy’s beneficiary and receives the full payout upon the insured person’s passing.
Key Features of a Viatical Settlement
- Eligibility: Typically available to individuals diagnosed with a life-threatening illness, such as late-stage cancer, ALS, or advanced heart disease.
- Payout Amount: Based on the policyholder’s life expectancy, policy size, and premium costs.
- Use of Funds: No restrictions—funds can be used for medical treatments, living expenses, debt relief, or alternative cancer care.
- Tax-Free Benefits: In most cases, proceeds are tax-free under IRS guidelines when the seller is terminally ill.
Who Qualifies for a Viatical Settlement?
To qualify for a viatical settlement, policyholders generally must:
- Have a life-threatening medical condition with a life expectancy of two years or less.
- Own a whole life, universal life, or convertible term life policy with a death benefit of at least $100,000.
- Be willing to sell the policy’s rights to a third-party company.
Some policies, such as group life, may have restrictions, so working with a reputable viatical settlement broker is essential to determine eligibility.
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How Much Can You Get From a Viatical Settlement?
The payout from a viatical settlement depends on several factors:
- Life Expectancy
Individuals with a shorter life expectancy (under 24 months) typically receive a higher payout.
Those with a longer prognosis may receive a lower percentage of the policy’s face value. - Policy Type & Death Benefit
Policies with a higher face value (e.g., $500,000 or more) result in larger settlements.
Whole and universal life policies are preferred over term policies, unless convertible. - Premium Costs
If the premiums are high, the offer may be lower since the buyer must continue making payments. - Viatical Settlement Offer
On average, viatical settlement payouts range from 50% to 80% of the policy’s death benefit.
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How to Use Viatical Settlement Funds
There are no restrictions on how you can use a viatical settlement. Some common uses include:
- Paying for expensive cancer treatments, including integrative and holistic therapies not covered by insurance.
- Covering medical bills and out-of-pocket costs.
- Paying off mortgages, debts, or daily living expenses.
- Funding bucket list experiences or quality time with loved ones.
- Providing financial security for family members.
Many cancer patients use viatical settlements to access alternative treatments like IV vitamin C therapy, hyperbaric oxygen therapy, and functional oncology programs. These therapies often fall outside of traditional insurance coverage but can be life-changing when combined with conventional treatments.
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Pros and Cons of Viatical Settlements
Pros
- Immediate access to cash to cover medical and living expenses.
- Tax-free settlement for those with a terminal diagnosis per IRS guidelines.
- No restrictions on how you use the funds.
- Can improve quality of life by reducing financial stress.
Cons
- Lower total payout than the policy’s full death benefit.
- Heirs will not receive the life insurance payout unless a portion is retained.
- Scams and predatory offers exist, making it crucial to work with a licensed provider.
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How Viatical Settlements Compare to Other Financial Options
Viatical settlements aren’t the only way to access financial support. Here’s how they compare to other options:
- Accelerated Death Benefit (ADB): Allows policyholders to access a portion of their death benefit directly from their insurance company. This option does not require selling the policy as a viatical settlement, but may have limitations on the amount available.
- Policy Loans: Some policies allow loans against their cash value, but this debt must be repaid with interest, or it will reduce the final death benefit. This option is not available on term policies.
For those specifically facing cancer treatment costs, viatical settlements often provide the more money, the most flexibility, and immediate financial relief.
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How to Find a Legitimate Viatical Settlement Company
Cancer Care Financial is a full service viatical settlement company helping cancer patients reach their financial needs to pay for cancer care costs.
Whether you are seeking integrative cancer treatments, the latest immunotherapy, covering loss of income, or helping with caregiver expenses, we walk you through all aspects of selling your life insurance policy to fund your cancer care.
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Take Control of Your Financial Future
Cancer and other life-threatening illnesses come with overwhelming financial burdens, but viatical settlements can provide a lifeline when needed most. If you or a loved one are struggling with cancer financial assistance, exploring a viatical settlement could help ease stress, fund treatments, and improve your quality of life.
To get started, speak with a trusted viatical settlement company, like Cancer Care Financial, or with a financial advisor who understands the complexities of cancer care costs and insurance-based financial solutions. Taking action today can help you secure the financial support you need for the care you deserve.
