A reputable viatical settlement broker will evaluate a policy and provide all availalbe options, even if that option does not include a settlement.
One of these non-settlement options is the Accelerated Death Benefit (ADB), which can be found as a rider in some insurance policies. The ADB rider allows a policyholder diagnosed with a serious illness to receive a higher percentage of the face amount of the policy while still living.
ADB riders can yield up to 100% of the face amount. The remaining face amount not paid to the policyowner stays in force as a death benefit payable to the named beneficiaries.
Like viatical settlements, there are stringent requirements in place for policyholders that wish to take advantage of the ADB. Typically, the insured must provide medical records proving a serious illness. ADB riders state that terminal illness will result in death between 6 months and 24 months, depending upon the carrier and type of policy.
The dollar amount of the benefit is paid up to the percentage and/or dollar amount outlined in the rider if the insured satisfies the terminal illness definition.
Reading the fine print of the policy is advised. Insurers will frequently charge administrative fees, which can be lump sums or a percentage of the payout. This needs to be factored in when comparing the ADB to a viatical settlement.
Another option to consider is borrowing a portion of the cash value that has built up over the years as a feature of the life insurance policy. Depending upon the premiums paid and the face amount of the policy, this can be a sizable sum that is available to the policy owner.
Policy loans are often available as no-interest or low-interest loans since the interest rate charged is offset by the interest rate credited. The loan amount will be deducted from the face amount of the policy upon death, but the face amount can still be a sizable amount for beneficiaries depending upon the percentage of cash value borrowed.
Consult with a licensed viatical settlement broker to review your policy and determine what the best alternative is for you.