A Utah viatical settlement is where an individual who is estimated to live less than two years wants to sell their life insurance policy to an investor who will pay them a large one time lump sum and continue to make all of the premium payments until the maturity of the insured. The investor will receive back the full death benefit that will pay back their initial cash outlay, any premium payments and earn them a profit.
A Utah viatical settlement as well as a viatical settlement in general is a small part of the overall life settlement industry that is estimated to grow to 15 billion per year.
The normal life settlement transaction is where an individual usually age 70 plus is going to sell their life insurance policy so they no longer have to make premium payments and instead receive a large one-time lump sum profit. Many affluent seniors like this strategy because it takes an illiquid asset meaning a life insurance policy and makes it a liquid asset meaning cash now. Some seniors have found that buying an annuity with the lump sum cash payment they received adds new cash flow to their estate.
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