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The most common objection to viaticating a life insurance policy is the individual's desire to leave the life insurance proceeds to the beneficiary(ies) – usually one's family. Anne is a perfect example of this situation.
A single mother of two adult children, Anne was diagnosed with breast cancer. Her doctor recommended that she separate from work in order to focus on her health, but Anne acquired a substantial debt as a result of her diagnosis and was afraid to separate from work. She felt that she needed her active income to support herself, her children, and the debt.
After meeting with a benefits counselor referred by Wilbanks, Anne learned how to separate from work with only a minimal decrease in her monthly income.
Unfamiliar with viatication, she was hesitant to explore the option because her life insurance proceeds were intended to protect her children after her death. When Anne understood that she could investigate this option without any commitment, she submitted an application on a $200,000 individual and a $88,000 group policy.
Ultimately, she received a tax-exempt offer of 72%, or $208,000. She was assisted in carving out $9,000 to replace $150,000 in a specialized life insurance utilizing her settlement proceeds. An additional $30,000 was carved out to remove her debt. She then used some of the proceeds to improve her home, and placed the balance of the settlement in investment vehicles incorporating features that protect people with catastrophic illness.
Two years later, Anne has over $300,000 in her investment portfolio, an additional $150,000 in life insurance coverage, and has increased the value of her home – a far cry from the original $288,000 in life insurance and $30,000 in debt.
Anne moved from a debtor position to having an estate exceeding $600,000!
This is just one example of a client whose unique financial circumstances were best solved by utilizing a Viatical Settlement.
