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Facts & Helpful Hints

If you have a terminal illness and are going to die - or if you are caring for someone who is - you may be thinking about time and money. 

You may also be thinking about life insurance. 

• Selling your life insurance policy to a viatical settlement company can help ease the burden of your final days.
• It can also be expensive, complicated and emotional.
  

Taxes and Public Benefits

If you sell your life insurance policy, you will get a lump sum of cash in return. 

Taxes

The federal government will not tax this money

•  If you have less than two years to live, and; 
•  The company is properly licensed. 

Also, because Wyoming has no personal income tax, this will not be taxed by the state.

Even so, the answers to tax questions may not be clear cut due to questions about licensing and how long you will live.

For this reason you should consult a lawyer or tax expert to help you understand your options.

Public Benefits

Collecting this money can keep you from getting public benefits, such as Medicaid.  Things like Medicaid may be affected because public benefit programs may count the money as income.

This is another reason to consult an expert before choosing.

You can also ask your viaticdondondon'tnt company about tax and public benefit issues.  If they don't have the answers ask them where you can find answers.

Helpful Hints

Use these tips to avoid costly mistakes and to help you make the choice that right for you

• Shop around.

Contact two or three companies to find the best deal. 

• Check with the State Attorney General's Office or the State Department of Insurance

Find out if companies must be licensed.  If the answer to this is yes, make sure your company is licensed. 

See if there have been any complaints against the company before you sign on with them.

• Don't fall for high pressure tactics.  You don't have to accept an offer.  You are allowed to change your mind. 

In fact, some states require you to take 15 days to think it over before completing a viatical settlement. 

• Make sure the company you are using has the money to pay you. 

Smaller companies may have cash flow problems.  Ask the company to set up an escrow account with a trustworthy bank. Your money can then be put in the
escrow account.  That way you know you will be paid.

• Ask for your money right away. 

It should take no more than few months to get your money from the time you first meet with the viatical settlement company.  After all the paperwork is done it should only take a few days to get your money out of escrow.

• Tthink about your will. 

If you take a viatical settlement there will be no life insurance payments to the person you made your beneficiary.  

Think about whether you would like to make provisions
for this person in your will.  Think about whether to talk to this person about your plans.