The simplest definition is the sale of an existing life insurance policy to a third party for more than its cash surrender value, but less than its net death benefit. Part of our clientele also seek life insurance options to pay for medical care. Viatical options are primarily for the chronically or terminally ill.
This financial transaction where the owner of an unwanted life insurance policy transfers ownership and beneficiary rights to an institutional investment fund. In exchange for transferring ownership, the insured receives a cash settlement that can often be four times greater than the cash surrender value. This is not a loan, it is a one-time cash transaction that results in a full transfer of ownership in exchange for a lump sum. The money belongs entirely to the policy seller and can be spent at his or her discretion.
Abacus Life functions as a provider in the secondary market for life insurance. Abacus provides the policy owner with a lump sum cash payment and takes over future premium payments and receives the death benefit upon the death of the insured.
For more information on your life insurance options and Abacus, check out our feature in the New York Times.