A viatical settlement is a type of life settlement in which a terminally or chronically ill person sells their life insurance policy for a lump-sum cash payment, typically at a higher percentage of face value than a standard life settlement.
Viatical Settlements
A viatical settlement is a life settlement for people with a terminal or chronic illness. You sell your life insurance policy for a lump sum — often 50–80% of the death benefit.
The money is yours to use however you need: medical bills, experimental treatment, family support, quality of life.
Get a Confidential ReviewThe main difference is medical qualification. Viatical settlements typically involve life expectancies under 24 months, and the qualifying criteria are tied directly to your diagnosis rather than just age.
Because of this, the payouts are often significantly higher as a percentage of the death benefit — and the process tends to move faster.
Viatical settlements often receive favorable tax treatment under IRC Section 101(g), which may make the proceeds tax-free for terminally ill individuals. Your tax advisor can clarify how this applies to your situation.
Typical Payout Range
50–80%
of the death benefit
Qualifying Life Expectancy
Under 24 months
for typical viatical qualification
Minimum Policy Face Value
$50,000+
typical minimum for market interest
If you have a life insurance policy and a terminal or chronic illness diagnosis, you likely qualify.
A policy face value of $50,000 or more is typical for buyers to have interest — though higher face values attract more competitive offers.
The most important step is a confidential review. We'll look at your policy and your situation honestly and tell you exactly what we think it's worth on the market.
Viatical settlement proceeds for terminally ill individuals are generally tax-free under federal law, per IRC Section 101(g).
For chronically ill policyholders, favorable tax treatment may also apply, though the rules are more specific. The tax treatment of your settlement depends on your individual circumstances.
Consult your tax advisor for guidance specific to your situation. Nothing on this page constitutes tax or legal advice.
| Factor | Viatical Settlement | Life Settlement |
|---|---|---|
| Who qualifies? | Terminally or chronically ill | Typically 65+ (any health status) |
| Typical payout | 50–80% of face value | 4–7x cash surrender value |
| Tax treatment | Generally tax-free (terminal illness) | Income + capital gains (above basis) |
| Timeline | 30–60 days | 60–120 days |
| Life expectancy | Typically under 24 months | No specific requirement |
| Regulation | Separate state viatical laws | Life settlement acts (43 states) |
A viatical settlement is the sale of a life insurance policy by someone who is terminally or chronically ill. The seller receives a lump-sum cash payment, typically 50–80% of the policy's face value.
A viatical settlement involves a terminally or chronically ill seller, while a life settlement typically involves a senior (65+) who no longer needs coverage. Viatical settlements generally pay a higher percentage of face value and may have different tax treatment.
For terminally ill individuals, viatical settlement proceeds are generally tax-free under Internal Revenue Code Section 101(g). For chronically ill individuals, the tax treatment may vary. Consult a tax advisor.
Viatical settlements can close faster than standard life settlements — sometimes within 30–60 days, depending on how quickly medical records are obtained.
We'll tell you honestly what your policy is worth and what to expect from the process.