What Is a Viatical License?

A viatical settlement occurs when a terminally ill person sells his life insurance policy to a third party for cash.

When a person covered by a life insurance policy receives a diagnosis of a terminal illness, he can sell his policy to a third party for cash. The process is called a viatical settlement and typically is handled by a broker required to have a viatical license.

State Licensing

Viatical licensing falls under state jurisdiction. A broker must be licensed in the state where the transaction is taking place. The broker must file an application with the state's department of insurance and complete a series of background checks.

No Uniform Standards

Some states still do not have licensing rules specific to viatical settlements. The National Association of Insurance Commissioners is currently studying the issue and has proposed legislation that would bring about uniform standards of licensing for all states.

Viatical Settlement Companies

The broker handling the sale of the life policy will typically work for a viatical settlement company. These companies specialize in purchasing life policies from terminally ill people. The companies must be licensed just like the brokers, and your state's department of insurance should be able to provide you with a list of companies allowed to deal in viatical settlements in the state.

References

• Free Law Advice: What is a Viatical Settlement?
• Policy Settlement Blog: Viatical License--What You Should Know About Your Advisor!
• Viatical Web: The Viatical Process
• California Department of Insurance: Viatical Settlement Companies

Resources

• Illinois Department of Insurance: Viatical Settlement Provider License Application
• Nevada Requirement Checklists for Viaticals/Life Settlements License