A viatical settlement is generally defined as the sale of a life insurance policy to a third party by a policy owner who is either critically or terminally ill. The third party buys the policy at a price discounted from the face amount of the policy but usually in excess of the premiums paid or the current cash surrender value and provides the insured an immediate cash settlement.
A life settlement is a similar transaction, but involves an insured who may still be in good health or their health may be starting to decline.
Viatical or life settlements are considered trading in life insurance policies. These transactions are not permitted at Sun Life Financial, regardless of the province in which the transaction takes place. Advisors must not be involved in the trading of these policies. This applies to all provinces, without exception.