In addition to death benefits and settlements, you should also consider:
- Borrowing Against the Policy—Besides claiming an accelerated death benefit, you may also have the option of borrowing money with the insurance policy as collateral. This is often the best solution if you need only a small fraction of the value of your policy. Borrowing against an asset also minimizes the amount of interest you will have to pay on the loans.
- Selling to Your Heirs—While not technically an alternative to viaticating, it may be worth your while to get a viaticalsettlement from your heir rather than from an outside party. Consider that investors are only willing to buy viaticals because they expect to profit off of them, often by as much as 25 percent of what they paid. By selling to an heir, you can still get the full benefit of a viatical settlement while allowing the person who would have benefited from your life insurance policy to keep those profits.
As with death benefits, be sure to check the fine print from your insurer before taking one of these steps. The better you understand the nuances of your life insurance policy, the easier it is to weigh all your options for reclaiming its value.