This page provides up-to-date information to help you understand more about viatical settlements and whether this option is right for you and your loved ones.
Learn the value of your life insurance policy today by calling us at (888) 418-5784, or fill out the One-Step Qualifier Form below.
A viatical settlement is a specific type of life settlement designed for individuals diagnosed with a life-threatening illness.
This legal option allows policyholders to sell their life insurance policy for a cash amount that is higher than the surrender value but less than the full face value.
In exchange for transferring ownership, the insured receives a lump-sum payment — often up to six to eight times the policy’s cash surrender value.
Unlike a loan, a viatical settlement is a one-time transaction. The seller releases ownership of the policy in return for a cash payout, which can be used entirely at their discretion.
If the insured meets certain criteria confirmed by a medical professional, the IRS typically considers the transaction tax-free.
Selling your life insurance policy to pay for medical needs is specifically for individuals suffering from a life-threatening illness. The transaction can typically be tax-free, so long as the insured meets specific criteria stated by a medical professional.
It is essentially the same as other life settlement options at its core. The significant caveat is that the insured is typically suffering from a life-threatening illness.
$150,000 Policy | Abacus Offer: $90,000
Sam was recently diagnosed with stage 4 rectal cancer and needed funds immediately to assist with treatment. He had a term policy that had a face value of $150,000, and he was planning to surrender it so he could utilize those monthly payments towards his treatment. Instead, he discovered life settlements and reached out to Abacus.
After we reviewed his case, Abacus offered him $90,000, which helped him pay for the treatment plan he wanted to pursue.
$600,00 Policy | Abacus Offer: $390,000
Alyssa had a $600,000 permanent policy and was prepared to surrender the policy for a cash value of $2,500 from the life insurance carrier.
She was able to receive $390,000 for the policy, and the owner was able to use the proceeds to cover their medical costs because of Abacus.
To qualify for a viatical settlement, the insured must have been diagnosed with a life-threatening illness such as cancer or ALS (Lou Gehrig’s Disease).
Most types of policies qualify for sale, including term life.
On average, Abacus Life pays the policyholder six to eight times more than their life insurance policy’s cash surrender value.
As a direct buyer, Abacus has created a streamlined process so you can sell your policy and receive these needed funds as quickly as possible.
Traditional
The Traditional option is to sell your full life insurance policy for a cash amount above the policy’s surrender value.
You have no further obligations or claims to the policy, with all future premiums paid by the buyer.
Retained Benefit
The Retained Benefit option means you would no longer pay any premiums and retain a portion of your benefit.
When the policy ends, beneficiaries will receive a guaranteed percentage, but you have no further obligations or payments to make.
Hybrid
The Hybrid option is a combination of two, where you would sell a portion of your life insurance policy.
With this option, you receive a cash payment now, your beneficiary receives a guaranteed percentage of the benefit when the policy ends, and you have no further obligation to pay future premiums.
Policy values are determined on a case-by-case basis, and there is no one-size-fits-all answer. Abacus will evaluate your specific situation with the highest level of professionalism and confidentiality, as well as with compassion and sensitivity to your situation. To provide your options, we will need to review the following:
To find out what your policy is worth, and what options may be available to you, please complete the form below, or contact us at (888) 418-5784 to speak with a member of our team.
Step 1: Deciding to Sell
Before deciding to sell your policy, the policyholder and their beneficiaries must consciously pursue this option. That means contacting your financial advisor or the Abacus team and looking into all alternatives to ensure that it is the most beneficial solution for you.
There is no cost or obligation to accept an offer at any time.
Step 2: Determining Eligibility
Certain specifics determine if an individual will qualify, such as premiums, the life expectancy of the insured, and the policy’s face value.
The information disclosed will be used by an in-house medical underwriter who will calculate the insured’s life expectancy using medical records and determine how much the policy is worth at no cost to the insured.
Step 3: The Offer
Abacus, or the chosen buyer, would then extend an offer to the insured. The proposal would be more than the price but less than the net face value. The buyer must be licensed in the state in which the owner of the policy resides.
Step 4: Acceptance
If the amount offered by the licensed buyer is acceptable to the policy seller, they can choose to accept the offer and request the required documents for review.
Step 5: Contracts
At this time, the licensed buyer generates state-approved contracting documents. These documents record the life settlement transaction and spell out the agreement between the seller and the purchaser. Both parties must sign and notarize the contracts.
Step 6: Verification
Once the contracts are executed and all the required accompanying documents are received, the verification process begins. Often completed by a third party like a law firm, this verification agent will check that all the contracting forms have been completed correctly. They may also check that the policy is in full force and good standing with the insurance company.
They will verify that the funds for the purchase are in an escrow account for the policy seller.
Step 7: Change of Ownership
Subsequently, we send a request for an ownership change to the insurance carrier. This ensures that the owner is changed from the current policyholder to the buyer or the financing entity that the buyer names as owner.
Step 8: Funds Transfer
After the insurance carrier has confirmed that the purchaser is listed as the owner, the escrow agent is instructed to release the funds to the seller. The new owner is now responsible for all premiums, and the seller has received payment for the transaction.
This is the last step of the process and concludes the transaction. The insured is then free to use the money at their discretion.
The transaction is usually made tax-free by the IRS, as long as the insured meets certain criteria. A medical professional, usually a doctor, confirms the terminal diagnosis.
For more information on how life insurance proceeds are taxed, visit the IRS.
Over the past decade, the market has become incredibly well regulated. The entire life settlement market is regulated on a state-by-state basis instead of nationally. Therefore, the responsibility falls on each state’s government to make sure that companies are behaving ethically. The majority of states do require specific licensing and practice strict oversight to ensure customer safety. Here at Abacus Life, we are proud to share that we are licensed for life and viatical settlements in all states excluding Alaska.
For many individuals facing a life-threatening illness, a viatical settlement is a viable financial solution. There are many reasons why selling your policy may be the right decision for you and your family. Some of these reasons include:
Abacus Life Settlements is a licensed life settlement company that takes a client-first approach.
We don’t believe that you should wait for the industry standard 45-60 days for life-saving treatment. A life settlement allows you to focus on what is most important right now.
To get started, simply fill out our One-Step Qualifier form below, or call us directly at (888) 418-5784.
We will review your information and provide an initial, no-obligation offer within 24-48 hours of contacting us, assuming you qualify.
© 2025 Abacus Life Settlements. Disclaimer: Abacus Life is not approved in all States. Abacus Life is a DBA of Abacus Settlements, LLC. Due to the inevitability of internet to enter States without intention, this website or any other correspondence does not constitute a solicitation for business in any particular State. This site is not intended for Louisiana, Texas, or Rhode Island residents. It is the responsibility of all intermediaries to follow the State laws and obtain any required licensure that corresponds to any particular financial or life settlement business in which they are engaging. Abacus Life will not accept business in States in which it is not licensed. The information contained in this site is not approved for or pertinent to Alaska or any other State in which Abacus is not licensed. We do not currently accept cases from AK. Copyright 2003-2025.
