- A contract made between a terminally ill individual (known as the viator) and a third party whereby the third party agrees to buy the terminally ill person's life insurance policy at a steep discount for readably available cash. Also known as "viatication", "spin-life", a "transferrable insurance policy", or as a "life settlement", a viatical settlement is a viable option for those who lack the funds to continue paying their medical bills and wish to buy themselves a few more months or years.
cash lump sum, in lieu of benefits, accommodation, advance, immediate payment
Related Terms and Acronyms
- Accelerated Benefit Option — Definition,
- An option that allows the insured to receive insurance benefits before they would ordinarily be available.
- Financing Entity — Definition,
- An entity that purchases an insurance policy or settlement contract.
- Living Benefits — Definition,
- The option for a life insurance policyholder to receive a portion of their death benefit in advance of their death.
- Loss Payee — Definition,
- An entity that is legally entitled to the benefits of an insurance claim.
- Policy Loan — Definition,
- A loan where a life insurance policyholder's death benefit is used as collateral.
- Spin-Life — Definition,
- A financial industry that specializes in buying life insurance policies from individuals or convincing individuals to take out new life insurance policies with an investor as a beneficiary.
- Stranger Originated Life Insurance (STOLI) — Acronym,
➥ Illegal in many Canadian provinces.
- A life insurance policy purchased by someone without any insurable interests with the insured person.
- Surrender Charge — Definition,
- A charge levied when a life insurance policyholder cancels his or her policy.
- Surrender Rights — Definition,
- The contractual right for a life insurance or annuity policyholder to cancel his or her policy.
- Viator — Definition,
- A person who agrees to sell his or her life insurance policy to a third party.
- Whole Life Insurance — Definition,
- Permanent life insurance with level premiums for the policyholder's entire lifetime.