Exemptions to the Individual Mandate
There are some cases where there is no penalty to not having coverage.
People's circumstances change, and so does their need for life insurance. Divorce, retirement from full-time employment, or the death of a beneficiary can all be reasons for a life settlement.
These are transactions in which the insured sell their life insurance policies for a certain percentage of the face value. A viatical settlement differs from a life settlement because the policy holder is terminally or chronically ill.
The viatical company may buy the policy and pay the premiums until the death of the insured or may find an investor willing to buy the policy.
Whoever owns the policy at the time of the original owner's death then receives the death benefit.
The percentage the original owner receives depends on the length of time the insured is expected to live. Before entering into a viatical settlement:
Look into alternatives to selling.
Look at accelerated benefits options and any other alternatives offered by your contract.
Know tax consequences may result from entering into a contract to sell your policy.
You may be placed in a higher tax bracket. This could change your entire insurance situation -- including your medical insurance.
You have the right to rescind a life or viatical settlement contract within 10 days of its execution.
This article is published on KansasMoney.gov. Find more information by contacting these state agencies: