Insurance Terms For Viatical and Life Settlements

Accelerated Death Benefit - A rider on life insurance policies providing cash in the event of terminal illness. An alternative to viatical and life settlements.

Cash Surrender Value - (CSV, Cash Value, Policy holder Equity) The amount of money available from a life insurance policy if terminated before the insured dies.

Death Benefit - The amount of cash paid to the beneficiary of a life insurance policy when the insured dies.

Death Futures - A slang term for viatical contracts. It refers to the fact that as an investment viaticals only mature at the death of the insured.

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Face Value - The amount of death benefit a life insurance policy is issued for.

FEGLI - Federal Employees Group Life Insurance

Insurable Interest - The reason, usually financial, that exists prior to the issue of a life insurance policy for an individual to be insured. In the case of a family it is the parent's need to provide for their family. In business it is the threat of financial loss on the death of a key man.

LIFA - The Life Insurance Finance Association (LIFA)

Life Settlement, Life Insurance Settlement - similar to viaticals
but involve insureds with longer life expectancies (two to fifteen years).

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Life Settlement Provider - An agent, company or investor who buys or finds a buyer for life insurance policies.

NASAA - North American Securities Administrators Association (NASAA)

Recision - Refers to the seller's (viator) right to rescind or cancel the viatical or life settlement contract and recieve his life insurance policy back.

SOLI - Stranger Owned Life Insurance. See STOLI.

STOLI - Stranger Owned Life Insurance. Refers to life insurance purchased by an insurable person for the sole purpose of reselling it to an investor. This practice usually violates the insurable interest clause of the life insurance contract. Regulators have moved to restrict this type of sale. Many insurance companies consider this type of sale to be a scam.

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Viatical - Refers to a life insurance policy sold for a percentage
of its death benefit.

Viatical Life Settlement Broker - Someone who finds buyers and negotiates the sale of a life insurance policy for the policy owner (viator). He may work by fee or commission but his responsibility is to the life insurance policy owner.

Viatical Settlement Contract - A contract which provides cash to a terminally ill person in exchange for ownership and beneficiary rights to their life insurance policy.

Viatical Settlement Provider - An agent, company or investor who buys or finds a buyer for a terminally ill person's life insurance.

Viatical Settlement - the sale of a life insurance policy by a terminally ill policy owner to gain access to the death benefit before the death of the insured.

Viator - The owner of a life insurance policy who sells it for a percentage of the death benefit.

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