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Funds for Living

Viatical Settlement (Sale)
vs.
Life Insurance Policy Loan

View the viatical settlement (sale) example below to understand how it works with a life insurance policy.

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Advantages of a Life Insurance Policy Loan vs. Viatical Settlement (Sale)

Thinking about selling your life insurance policy? While every case is different, there are many benefits of a life insurance loan as compared to an outright viactical sale of the life insurance policy, also known as a viatical settlement.

Financial Breakdown of a Life Insurance Policy Loan vs. a Viatical Settlement (Sale)

This is an example that illustrates how a life insurance policy loan (our Funds for Living Program) can be a much more attractive option than a Viatical Settlement (sale).

Consider this example of a Viatical Settlement (sale) vs. a Life Insurance Policy Loan:

  • Bob has Stage IV pancreatic cancer diagnosis (life expectancy of 24 months***).
  • Bob owns a life insurance policy with a face amount of $250,000 (premium payments of $417 per month).
  • Fifth Season extends a loan for 50% of his life insurance policy for a total of $125,000.
  • Fifth Season assumes responsibility for his $417 monthly premium payments.

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Note: Our program was recently renamed Funds for Living.

* – Total money to Insured and Beneficiary = Policy Face amount minus fees and capitalized interest

** – Proceeds of sale may be taxable

*** – Example assumes mortality of insured 30 months after loan

Watch a short video to learn how the Funds For Living Program can work for you:

Benefits of the Funds for Living Program

  • Policy amounts in excess of loan balance are paid to beneficiary
  • Money advanced generally not taxable
  • Streamlined process
  • Working directly with funding source
  • Generally will not affect eligibility for other assistance
  • Reputable lender – in business since 2007, more than 400 loans and over $75M advanced
  • Borrower no longer responsible for premium payments
  • Fast turn around and access to funds in 3-5 weeks

How Viatical Settlements (Sales) Differ From Life Insurance Policy Loans

  • Once sold, all benefits under policy go to investor
  • With viaticals, cash advance is generally taxable as income (exception for very short life expectancies)
  • Process typically takes 6-8 weeks
  • Often dealing with broker and not the actual money source – policy gets “shopped” and numbers at start can be very different from what’s actually received
  • Money received may disqualify recipient from other programs
  • Investor/Stranger owns your policy – no alignment of interest