Individuals have been selling their rights of life insurance policies since the beginning of the insurance industry. This, however, was a quite unknown practice until the AIDS epidemic heightened in late 1980's. When insured's stricken with the disease learned about the living value to life insurance, the Viatical Settlement Industry is born.

Viatical Settlement Benefits
• Immediate cash inorder to ease financial burdens
• Additional cash to compensate for loss of income
• Relief from Premium paid
• Funds to seek treatment not covered by health insurance

Definition
It is the selling a life insurance policy issued on the life of a person, who has a terrible illness or condition that is expected to result in death within 84 months, for an amount that is less than policy's face value. The person with the life-threatening illness who is insured under the policy is called a viator. He may or may not be the owner of the policy. But only the holder of the policy has the right to sell it. If you do not own the policy, owner cannot sell it without your consent. The unit that buys the policy is called a viatical settlement provider, also, there are persons called brokers, who help with the sale of the policy. This settlement offers you the chance to receive a portion of your policy's death benefit as you are still alive, giving you an option to ease the financial stress that goes with an illness or condition.

Working of these settlements
Most of the providers or brokers will ask you to fill an application and medical release forms so that they could collect information from your insurance company and your doctors. All that gathered is to be kept confidential and cannot be given to someone without your written approval. If you meet the criteria, the provider will make an offer for your policy. The amount offered for your insurance policy will be purely based on the facts such as how long you are likely to live, the sum you pay for premiums, the rating of your life insurance company, and your policy's other provisions. If you accept the offer, you would be asked to sign a viatical settlement contract.

Investing in the settlement contract
Viatical Settlement Contracts are nowadays being sold as securities, and even though there is nothing inherently wrong with investing in viatical settlements, the potential investors need to be alert of a few basic facts and the difference between this settlement and other kinds of securities. The first thing to keep in mind is that most often the investor in a contract is reliant upon the provider, or other party selected by the provider, see to it that the policy contract and the fundamental life insurance policy is maintained. This can involve everything from determining the life expectancy of the viator to safeguarding of the life insurance policy.

Most states consider this type of contract that is sold as an investment, as a security and regulate these investments as such. As always, anybody considering investing money in any security should carefully research the product, the individual, and the company that is offering the security.