A viatical or life settlement may or may not be the right choice for you. If you need money, you may have other choices besides selling your life insurance policy to a viatical & life settlement provider:
Accelerated Death Benefit: Check to see if your policy has an “Accelerated Death Benefit” provision or find out if your life insurance carrier will offer accelerated death benefits. An accelerated death benefit is a feature of a life insurance policy that typically pays some or all of the policy’s death benefit before the insured dies. It could pay you a substantial portion of your policy’s death benefit without needing to sell your policy to a third party. This usually has little or no cost.
Terminal Illness Rider (Often called Accelerated Death Benefit Rider) vs. Critical Illness Rider: These two riders are often confused, but they are not the same thing. The Terminal Illness Rider, often called Accelerated Death Benefit Rider, is an add on that provides the same accelerated death benefit privilege, but only for a terminal illness. So to qualify for this payout you would have to be diagnosed as having less than 24 months to live. While some of the critical illnesses may be considered terminal (like cancer), it doesn't mean they have to be for you to get the payout. The terminal illness rider usually comes with a policy at no extra cost.
Cash Value: Find out if your life insurance policy has any cash value. You may be able to use some of the cash value to meet your immediate needs and keep your policy in force for the beneficiaries without having to sell it to a third party. You may also be able to use the cash value as security for a loan from a financial institution.
Contact your life insurance carrier to learn about other options under your policy.