Financial Relief for
Terminal Illness
At Abacus Life, our goal is to become your trusted source for information about viatical settlements. By providing you with up-to-date knowledge, we hope to help you understand whether this option is right for you.
What is a Viatical Settlement?
A viatical settlement is a specific type of life settlement designed for individuals diagnosed with a terminal illness. This legal option allows policyholders to sell their life insurance policy for a cash amount higher than the surrender value but less than the full death benefit.
In exchange for transferring ownership, the insured receives a lump-sum payment, often up to 6–8 times the policy's cash surrender value. If the insured meets certain criteria confirmed by a medical professional, the IRS may consider the transaction tax-free.
Unlike a loan, a viatical settlement is a one-time transaction. The seller gives up all rights to the policy in return for a cash payout, which can be used entirely at their discretion. In some cases, the settlement may also take the form of a paid-up death benefit.
How Is This Different from a Life Settlement?
Selling your life insurance policy to pay for medical needs is specifically for individuals suffering from a terminal illness. It is essentially the same as a standard life settlement at its core — the significant caveat is that the insured is typically suffering from a terminal illness and has a life expectancy of fewer than two years.
| Viatical Settlement | Standard Life Settlement |
|---|---|
| Insured is terminally or chronically ill. | Insured is typically a senior in their late 70s. |
| Proceeds typically range from 50%–80% of the death benefit. | Proceeds are usually around 10%–80% of the death benefit, depending on life expectancy. |
| IRS may allow proceeds to be tax-free when specific criteria are met. | Funds are generally subject to taxation unless they meet IRS guidelines. |
At a Glance
A viatical settlement lets terminally ill policyholders sell their life insurance now for immediate cash, typically far more than surrender value.
When IRS criteria are met, the proceeds may be entirely tax-free.
Terminally Ill
A life-threatening illness such as cancer or ALS with a life expectancy of fewer than two years, as confirmed by a medical professional.
Chronically Ill
A long-term or permanent illness that limits daily activities, which may also qualify a policyholder for a viatical or accelerated benefit.
Death Benefit / Face Value
The full amount beneficiaries would receive upon the insured's death; the ceiling of any settlement offer.
Cash Surrender Value
What the insurer pays if you cancel. A viatical settlement offer is always significantly higher.
Case Studies
These are real Abacus clients who used a viatical settlement to fund medical care and improve their quality of life.
Sam, 75 — Boca Raton, FL
$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 with a face value of $150,000 and was planning to surrender it so he could put those monthly payments toward his treatment. Instead, he discovered life settlements and reached out to Abacus. After reviewing his case, Abacus offered him $90,000, which helped him pay for the treatment plan he wanted to pursue.
Alyssa, 79 — Houston, TX
$600,000 Policy | Abacus Offer: $390,000
Alyssa had a $600,000 permanent policy and was prepared to surrender the policy for a cash value of just $2,500 from the life insurance carrier. She was able to receive $390,000 for the policy through Abacus, and she was able to use those proceeds to cover her medical costs — an outcome that would have been impossible had she accepted the carrier's offer.
Get One Step Closer to Learning the Value of Your Policy Today!
Use our Life Settlement Calculator for a free consultation with no obligation to sell.
Life Settlement CalculatorCan I Qualify for a Viatical Settlement?
To be eligible for a viatical settlement, the policyholder must be terminally ill or chronically ill with a life expectancy of fewer than two years. The diagnosis must be confirmed by a medical professional, usually a physician.
Most types of policy types qualify for a viatical, including term life insurance. The average payout of a life insurance sale is 4–6 times the policy's cash surrender value. At Abacus Life, we pay a policyholder an average of 6–8 times the cash surrender value of their life insurance policy.
Being a direct buyer, Abacus has created a streamlined process to make selling your policy fast while cutting out the middle man so we can pay you more.
What Policy Types Qualify?
Almost all types of life insurance policies qualify for a viatical settlement, including universal life, whole life, term life, convertible term, group life, and survivorship policies. Because the insured has a terminal diagnosis, even term policies that would not otherwise qualify for a life settlement can often be sold.
Check My EligibilityQuick Eligibility Guide
Terminal or chronic illness confirmed by a medical professional
Life expectancy of fewer than 2 years
$100,000+ in death benefit (general guideline)
Most policy types qualify, including term life
Payout typically 50%–80% of the death benefit
When Is the Right Time to Pursue a Viatical Settlement?
For many individuals facing a terminal illness, a viatical settlement can be a strong financial solution. You may be able to cover all or part of the costs involved in your medical care, including travel, stay, and your actual treatment costs.
Can No Longer Afford Premium Payments
Depending on your policy terms, changes in the insurance market or poor policy performance could increase your premium payments. Unexpected financial challenges — such as rising medical bills, legal expenses, assisted living costs, or tax obligations — may further strain your budget. A viatical settlement eliminates all future premium payments.
Funds Needed for Medical Care
Coping with a medical crisis while worrying about bills works against palliative care and hospice goals. Viatical settlements can provide an inflow of funds to pay off bills or fund experimental and alternative treatments that may not be covered under insurance.
Improve Your Quality of Life
Patients and their families can receive funds to pay for care or quality of life experiences. Many clients use their funds to tackle their "bucket lists." Many insured individuals also want to see their family enjoy their life insurance money now, rather than not being present to share in their happiness.
Eliminate Financial Burden on Your Family
A terminal diagnosis is already an overwhelming burden. A viatical settlement allows you and your family to focus on what matters most. It provides immediate financial relief — without waiting years for a death benefit to be paid out.
An important note from Abacus: If you are struggling with medical bills, having difficulty keeping up with your premiums, or want immediate income, a viatical settlement could be right for you. However, we at Abacus advise that anyone considering a settlement take a close look at their life insurance and financial situation to make sure they make the correct choice for themselves and their family. If you do not have an immediate need for a lump sum of cash, we suggest taking time to consider all of your options — realistically, the greatest payout you can ever receive is the full death benefit.
Free Consultation with No Obligation to Sell
You will receive an initial offer within 24–48 hours of contacting us, assuming you qualify.
Life Settlement CalculatorHow Many Different Options Are There?
There are three options to consider: Traditional, Retained Benefit, and Hybrid. The right one depends on your financial goals and what matters most for your family.
How Much Is My Policy Worth?
Each case is specific, and there is no one-size-fits-all answer. We handle each case individually and with the utmost confidentiality and sensitivity. Understanding your options will require knowledge of personal details, including:
- Policy Type — universal life, whole life, term, group, etc.
- Policy Face Value — the death benefit / coverage amount
- Age of the Insured
- Health Status — diagnosis, life expectancy, current condition
To see exactly how much your policy is worth, we recommend getting an estimate now using our calculator or contacting us at 800-561-4148 to learn more.
Key Valuation Factors
Life Expectancy
Our in-house medical underwriter calculates life expectancy using medical records at no cost to you.
Diagnosis Severity
A terminal diagnosis with a shorter life expectancy typically increases the payout percentage relative to the death benefit.
Premium Schedule
Higher ongoing premiums reduce the offer. The more a buyer must pay going forward, the less they can pay upfront.
Policy Size
Larger policies yield larger payouts. Viatical settlement payouts typically range from 50%–80% of face value.
Viatical vs. Surrender
Alyssa's case illustrates the difference clearly:
On a $600,000 policy, that's 156× more than the surrender value.
The Viatical Settlement Process
As a direct buyer, Abacus has streamlined the process to move quickly and cut out the middleman. We don't believe you should wait 45–60 days for life-saving treatment.
Deciding to Sell
Before deciding to sell, the policyholder and their beneficiaries consciously pursue this option. That means contacting your financial advisor or the Abacus team and looking into all alternatives to ensure it is the most beneficial solution. There is no cost or obligation to accept an offer at any time.
Determining Eligibility
Certain specifics determine qualification, such as premiums, the life expectancy of the insured, and the death benefit. An in-house medical underwriter calculates life expectancy using medical records and determines how much the policy is worth — at no cost to the insured.
The Offer
Abacus extends an offer to the insured for more than the cash surrender value but less than the net death benefit. Abacus must be licensed in the state in which the policy owner resides.
Acceptance
If the amount offered is acceptable, the policy seller accepts and requests the required documents for review. You are never obligated to proceed.
Contracts
State-approved contracting documents are generated, recording the transaction and spelling out the full agreement between the seller and purchaser. Both parties must sign and notarize the contracts.
Verification
A third-party verification agent (often a law firm) confirms all contracts are completed correctly, the policy is in good standing, and purchase funds are held in an escrow account for the policy seller.
Change of Ownership
We submit a request to transfer ownership to the insurance carrier, changing the owner from the current policyholder to Abacus or its named financing entity.
Funds Transfer
After the carrier confirms the new ownership, the escrow agent releases funds to the seller. The new owner assumes all future premiums. The transaction is complete. The insured is free to use the money at their discretion.
How Long Does It Take?
Our goal is to complete the viatical settlement process as quickly as possible. We do not believe you should have to wait the industry standard 45–60 days when facing a terminal illness.
Abacus will supply you with an initial offer within 24–48 hours of contacting us, assuming you qualify.
Start TodayNo Restrictions on Use of Funds
There are no restrictions on how you use your viatical settlement proceeds. Common uses include:
Are Viatical Settlements Taxable?
The transaction may be tax-free by the IRS, as long as the insured meets certain criteria. A medical professional, usually a doctor, confirms the terminal diagnosis — this is one of the key requirements for tax-exempt treatment under IRS guidelines.
This is one of the most significant advantages viatical settlements have over standard life settlements, where proceeds are typically subject to ordinary income and capital gains tax.
For more information on how life insurance proceeds are taxed, visit the IRS or consult a licensed CPA who can review your specific situation.
Life Settlement Taxation vs. Viatical Taxation
Viatical Settlement Regulations
Over the past decade, the market has become incredibly well-regulated. The entire life settlement market is regulated on a state-by-state basis rather than nationally, placing responsibility on each state's government to ensure companies are behaving ethically.
The majority of states 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.
Your Rights as a Seller
Most states offer a rescission period of 1–2 weeks after a settlement is completed. During this window, you can return the payout and reclaim ownership of your policy. Once the period expires, the transaction is final. Always read your purchase agreement carefully and consult your financial advisor.
View Abacus Licensure by StateIs a Viatical Settlement Safe?
Pursuing a viatical settlement is a delicate process, and it's vital that you work with a reputable, licensed company.
Abacus ensures your personal information stays private. Details shared during the process remain only within Abacus. We provide full transparency on how we generated your offer so you can feel confident in every step.
Abacus is HIPAA Certified, fully licensed nationally, and holds an A+ BBB rating.
Additional Financial Resources
A viatical settlement is one tool among many. Here are additional resources that may help you and your family navigate the financial challenges of a terminal illness.
Patient Advocate Foundation: Co-Pay Relief
Provides direct financial assistance to patients with chronic or life-threatening illnesses to help cover co-pays.
copays.org →CareCredit
A healthcare credit card designed to help patients manage out-of-pocket healthcare costs through flexible financing options.
carecredit.com →Partnership for Prescription Assistance
Helps qualifying patients access prescription drugs through patient assistance programs at low or no cost.
pparx.org →GoFundMe
A crowdfunding platform that allows friends and family to contribute financially during a medical crisis or emergency.
gofundme.com →PAN Foundation
Provides underinsured Americans with assistance covering out-of-pocket costs for treatment of life-threatening, chronic, or rare diseases.
panfoundation.org →Triage Cancer
A nonprofit that provides free education on legal and financial issues for cancer patients, survivors, and caregivers.
triagecancer.org →How Do I Get Started?
To get started, fill out our free and instant Life Settlement Calculator. Abacus will supply you with an initial, no-obligation offer within 24–48 hours of contacting us, assuming you qualify.
Abacus Life Settlements is a licensed life settlement company that takes a client-first approach. We don't believe that you should wait the industry-standard 45–60 days when life-saving treatment may be needed now. A viatical settlement allows you to focus on what is most important right now.
With over $10 billion in policy face value purchased and an average payout of 6–8 times the cash surrender value, Abacus is the direct buyer committed to getting you the most for your policy — fast.
The Abacus Promise
Get one step closer to learning the value of your policy today.
