Since the early days of the insurance industry, people have been selling and trading their ownership interests in life insurance products. The practice of buying ands selling an interest in a life insurance policy was not common or at all widespread, however, until the late-1980s. The practice of buying and selling interests in life insurance policies was spurred onward when the AIDS epidemic heightened in the 1980s.

When AIDS patients learned that a life insurance policy could be converted into a valuable liquid asset – turned into cash – through viaticals, individuals afflicted with cancer began to take a look at the usefulness of viaticals or viatical settlement options. While fortunately the rate of deaths by cancer has seen a steady decline over the past three decades, the use of viaticals by cancer patients has become more prevalent. Terminal cancer patients have learned that viaticals can be an important financial option for them as they plan the final days of their lives.

By utilizing viaticals, cancer patients can ease financial burdens associated with skyrocketing medical costs. Additionally, viaticals can provide a replacement stream of income for wages that are lost by a terminal cancer patient due to his or her illness. (Supplemental information on various financial planning options available to terminal cancer patients can be found by visiting cancer.org.)

With viaticals for cancer patients, a terminally ill person's life insurance policy is 'sold' through a viaticals settlement company. The cash from the viaticals 'sale' is provided to the terminally ill cancer patient for his or her use during the remaining period of his or her life. Upon the death of the insured cancer patient, under viaticals settlement agreements, the 'purchaser' of the policy will receive the actual life insurance proceeds.

There are a number of specific benefits to the cancer patient who utilizes a viatical settlement. First and perhaps foremost, viaticals provide a terminally ill cancer patient immediate cash to assist in meeting immediate financial needs. The last thing a family of a terminally ill cancer patient needs is to have to worry about finances. Viaticals help resolve any financial problems that may attend a terminal ill cancer patient in his or her final months of life.

Second, viaticals provide terminal cancer patients additional funds to compensate for income that may have been lost due to the prolonged nature of the disease.

Additionally, after a viatical settlement is made, a cancer patient is relieved of monthly premium obligations.

Fourth, after a viatical settlement, a cancer patient will have supplemental funds available to cover medical expenses that might not otherwise be covered by traditional health insurance policies of HMO plans or programs.

Many men and women find viaticals useful to help pay off debts when a diagnosis of terminal cancer is made. These people want to strive to ensure that their loved ones are not saddled with paying unnecessary debts after the terminally ill cancer patient passes.

Finally, in some instances, viaticals are tax-free settlements for cancer patients. However, before any decisions are made pertaining to the tax consequences of one viatical settlement or another, an interested person should consult with his or her tax preparation professional.