Viatical settlement involves the selling of a life insurance policy by a terminally ill person to unrelated investors who can be banks, private companies, or brokers. The seller gets a lump sum amount as cash payment while the investor gets the death benefits on the persons demise.

Grim as they may sound, viatical settlement can provide financial relief to the terminally ill people, provided they do not fall prey to unscrupulous elements who may take advantage of the vulnerability of the person.

A terminally ill person can sell his policy to a private funding company or to w broker, who will then sell to other viatical settlement companies. The physical and emotional demands of the terminally ill person are traumatic enough and so a lot of care needs to be taken to ensure that the policy is not sold to any fraudulent broker. In order to ensure this, you must ensure that the broker has a license to purchase viatical settlements. The New York State law has made it mandatory for all brokers to be licensed. Therefore, you must make it a point to check the license of the concerned broker. If you find that the broker is unwilling to show his license, do not continue with the transaction at any cost.

Another thing that you must keep in mind is that you must go through the copy of the agreement very carefully before signing it. The broker will purchase your policy for a reduced amount of the actual face value, but do not give in to pressure tactics and try to get the best bargain possible. You should contact your insurer and check if your policy contains any accelerated benefits, because these benefits allow a person to collect a part of their death benefits.

The viatical settlement broker will charge a fee for completing the life settlement agreement. This fee is based on the contract between both the parties and is approved by the New York Superintendent of Insurance.