What Is a Viatical Settlement?

How a Viatical Settlement Works

Every case is unique, but the process generally follows the same path. Windsor begins by reviewing your life insurance policy to confirm details such as coverage amount, premium obligations, and current status. We also work with independent medical underwriters to understand your health condition and life expectancy, which helps determine the policy’s market value.

Once your case is ready, it’s introduced to a network of institutional buyers. These are regulated financial entities, not individuals, who purchase life insurance policies as part of their investment portfolios. They review the policy, submit offers, and Windsor negotiates on your behalf to ensure the final offer is both fair and competitive.

After you accept an offer, the ownership of the policy is transferred to the buyer. The buyer then assumes all future premium payments, and your settlement funds are released—often within two to six weeks from the time your paperwork is complete.

The Windsor Process

Our process is designed to make something complex feel simple and human. It begins with a confidential consultation, where we review your policy and confirm your diagnosis. From there, Windsor handles all communications with potential buyers, manages documentation, and keeps you informed at every step.

When an offer is made, you’ll receive the full details in plain language. If you choose to move forward, we coordinate with the buyer, transfer policy ownership securely, and ensure your funds are released as soon as the transaction closes. There are no expiring offers, no hidden fees, and no pressure—just clarity and support throughout the process.

Learn more about the detailed process →

Who Qualifies for a Viatical Settlement?

You may qualify if you’ve been diagnosed with a terminal illness, generally defined as a life expectancy of 24 months or less, or a chronic illness that requires long-term care or assistance with daily living.

The type and value of your life insurance policy also matter. Whole life and universal life policies tend to qualify most easily, though convertible term policies can also be eligible. The higher your policy’s face value and the lower its ongoing premiums, the more attractive it becomes to buyers.

If your policy has lapsed or carries a loan balance, you may still qualify. Windsor’s team reviews every case individually, helping you understand what’s possible before any decisions are made.

Learn more about eligibility →

Determining the Value of Your Policy

The value of a viatical settlement depends on several factors, including your health, the policy’s face amount, premium requirements, and the current investment climate. Policies owned by terminally ill individuals typically yield higher payouts because buyers take on less long-term risk.

While every situation differs, settlements often return between fifty and eighty percent of the policy’s face value. Windsor’s role is to make sure you receive true market value by introducing your policy to multiple licensed buyers rather than a single company with a fixed agenda.

Learn how independent brokers calculate the value a policy →

Are Viatical Settlements Taxable?

Under Internal Revenue Code, the proceeds from a viatical settlement are generally tax-free for individuals certified as terminally ill. Those with chronic illnesses may also qualify for tax-free treatment when the funds are used for qualified long-term care expenses.

Because tax rules can vary from state to state, it’s important to speak with a qualified tax advisor before completing a settlement. Windsor Life Settlements is not a tax advisory firm, and while we can help you understand the general guidelines, every case should be reviewed by a licensed professional.

Learn more about viatical taxes →

Viatical Settlement vs. Accelerated Death Benefit

Many life insurance policies include an Accelerated Death Benefit, which allows the insurer to pay out a portion of the death benefit early if you’re terminally ill. It can be helpful, but it’s usually limited—often providing a smaller payout and requiring extensive documentation.

A viatical settlement, by contrast, involves selling your policy to a third-party buyer. The payment typically reflects the market value of your policy, not just what the insurance company is willing to advance. It also removes the burden of paying future premiums. For many, it’s a faster and more flexible way to unlock their policy’s full potential.

Compare both options →

Why Work with an Independent Viatical Settlement Broker

Not all companies in this industry operate independently. Some well-known “marketing companies” are owned by the very buyers they claim to compare, creating the illusion of choice while funneling every policy into the same investor’s hands.

Windsor does things differently. As an independent broker, we represent policyholders exclusively. Our job is to bring transparency and competition into a process that often hides both. By introducing your policy to a wide network of institutional buyers, we let the market do what it does best—compete. The result is typically a stronger offer and a faster, cleaner transaction.

Learn more about working with a viatical broker →

Regulations and Consumer Protections

Viatical settlements are regulated by state insurance departments to ensure transparency and fairness. Most states require licensing for brokers and providers, detailed disclosures outlining every party’s role, and a right of rescission that allows policyholders to change their minds within a defined period after closing.

Windsor conducts transactions only in fully compliant states and follows every required consumer protection standard. Our clients are given clear written disclosures before signing, and all funds are transferred through a licensed escrow agent to ensure safety and accountability.

Review regulations by state →

Common Questions About Viatical Settlements

Policyholders often ask whether they lose their coverage once they sell their policy. The answer is yes—ownership transfers to the buyer, who becomes the beneficiary and assumes all remaining premium payments.

Another common question is timing. Most viatical settlements are completed within two to six weeks, depending on how quickly medical and insurance records are provided. Family members can be involved throughout the process, and Windsor encourages that transparency.

The companies purchasing these policies are typically institutional investors—licensed entities that view life insurance as a long-term, regulated asset class.

More answers in our FAQ →

Getting Started with Windsor

If you’re living with a serious illness, you deserve to know all your options. A viatical settlement can help you unlock the value of your life insurance policy today—privately, securely, and on your terms.

Windsor Life Settlements is an independent broker, not a buyer. We work only for you, helping you understand eligibility, evaluate offers, and make informed decisions without pressure.

Your first step is a confidential, no-obligation policy review. From there, you’ll know exactly what your policy is worth—and whether a viatical settlement makes sense for you.