A viatical settlement (from the Latin "viaticum") is the sale of a policy owner's existing life insurance policy to a third party for more than its cash surrender value. 

A viatical settlement is when someone who is terminally or chronically ill sells their life insurance policy to a third party. The policy seller receives a lump sum cash payout that is more than the cash surrender value, but less than the death benefit. The buyer receives the policy’s death benefit when the seller passes.



Anyone with a severe medical condition knows that health insurance doesn’t cover everything. Fortunately, life insurance policyholders have a few options that can help solve financial problems. A viatical settlement is one of them.