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A viatical settlement is a contractual agreement to provide a life insurance policyholder immediate cash in exchange for the sale and transfer of life insurance policy ownership rights.
While a viatical company may advertise that they pay 85% of the death benefit, once an actual offer is obtained, this figure may be closer to 70%, 60%, or even 50%. Myth #2: A viatical settlement pays more than an accelerated death benefit.