How to Prepare for a Loved One’s End of Life

The end of anyone’s life is never a happy occasion, but to bid farewell to a loved one can be a very traumatic experience. The last thing anyone wants is to be burdened with trivial issues when there is a loss, but the sad fact is that there are simply too many financial issues that get passed over to a next of kin and/or a spouse when a person passes away. Medical bills that have been accrued as part of end-of-life care, funeral arrangement costs, and various miscellaneous expenses that transfer to a living relative can often be taken care of by the death benefit payout of a life insurance policy that the deceased had.

But no amount of money is going to bring back a loved one, and those with limited time left in life are not going to want to leave loose ends for their loved ones to tie up. So what can be done, aside from having life insurance that may or may not cover costs, depending on what the insurance policy allows for? How can the money that has been earned in life, ensure that there are no debts after death?

Viatical Settlements

There are a few factors behind the growth of viatical settlements and viatical brokers in recent years. Chief among them is that pre-paid funeral packages have risen in popularity, and changing health insurance (as well as healthcare itself) has contributed to a reduction in medical bills. To put it simply, dying is no longer as expensive as it used to be. It was the case for many years that everyone had to have life insurance just in case the worst happened, and your family was saddled with debts. For the United States, where healthcare is not free at the point of use, the only way past those expenses was with a large sum payout. Add to that the fact that life insurance policies were sometimes a workplace incentive, and the reasons behind their necessity were at the forefront.

Viatical settlements are essentially a sale of a life insurance policy. Unlike selling life insurance back to the insurance company for the cash surrender value, the best viatical settlements are those that aim for a higher payout. The process for viaticals is this: Upon receiving news that a life insurance policyholder has a chronic or terminal illness—thus rendering them completely incapacitated or deceased within 24 months—they reach out to a viatical broker. This broker sets up a viatical settlement in which a lump sum will be paid to the policyholder in exchange for the life insurance policy itself. The third-party buyer, ( or”beneficiary”) takes over the monthly premiums until the original life insurance policyholder passes away, at which point they can claim the death benefit payout themselves. The cash value of the lump sum received from the viatical settlement can be up to 70% of the death benefit.

Not as Much But Worth Much More

By this viatical settlement definition, it seems that the original policyholder loses out, but in actual fact, this can be a real boost in a person’s final days. Depending on the policy, even 70% can be more than enough to cover any end-of-life care that health insurance won’t, and help negate funeral costs so that loved ones don’t have to.

However, beyond the obvious expenses, a viatical settlement can simply be used to spend quality time with loved ones whilst that is still possible. Going on a trip, ticking off the bucket list, or simply paying off spousal work commitments so that your joint finances will cover your limited time together are all possible ideas, however, what you do with the viatical settlement is entirely up to you. It also must be noted that you still need a life insurance policy if you are to pursue a viatical settlement. That may seem obvious, but 60% of Americans don’t have a life insurance policy at all.

Life After Death

For those who are left behind, there is no rulebook or guide for how best to handle the mourning process. A few tips on etiquette for widows can be found on Sometimes Daily’s blog, and there is some good advice including not dropping the “Mrs.” title from your name and continue to wear your wedding ring. Aside from helpful advice, there is little more that can be offered. Except to say that time is precious, and if anything can help you make the most of what little there is left together, consider a viatical settlement to help fund it.