Life Settlement Options Explained: Traditional, Partial, Retained Death Benefit, And Viatical

If you own a life insurance policy you no longer need—or can’t afford—you may have more options than simply surrendering or lapsing it. Today, policyholders can choose from several types of life settlements, each designed for different needs and circumstances.

Here’s a breakdown of the four main options:

Traditional Life Settlement

A traditional life settlement is the most common type. In this transaction, you sell your entire life insurance policy to a licensed life settlement provider. In return, you receive a cash payout at closing, and the buyer takes over premium payments and becomes the new owner and beneficiary.

This option is typically available to seniors who no longer need their coverage or want to receive cash for retirement, medical costs, or other financial goals.

Partial Policy Life Settlement

A partial policy life settlement is when you sell a portion of your life insurance policy to a licensed provider. In exchange, you receive a lump-sum cash payment, and the funder assumes responsibility for their share of future premiums.

This option works well for people who want flexibility—cash now, but still some protection later.

Retained Death Benefit Life Settlement

A Retained Death Benefit Life Settlement allows you to sell part of your life insurance policy for immediate cash while keeping a portion of the death benefit in place for your beneficiaries.

In many cases, a retained death benefit also means you may eliminate premium payments, while still preserving a defined payout for your beneficiaries.

This is an attractive choice if you want to:

• Eliminate premium payments.

• Access immediate cash.

• Ensure beneficiaries still receive a defined payout.

Viatical Life Settlement

A viatical settlement is only available to individuals diagnosed with a terminal illness. Unlike other settlement types, age is not a limiting factor.

The benefit of a viatical settlement is immediate financial relief—funds can be used to cover treatments, caregiving, travel, or meaningful time with family. While traditional, partial, and retained death benefit settlements serve broader needs, viaticals exist specifically to support those facing a terminal diagnosis.

Who Typically Qualifies?

While every case is unique, life settlements are most often available to:

• Seniors age 65 and older

• Policyholders with $100,000 or more of coverage

• Individuals who have experienced a change in health or have been diagnosed with a severe or terminal illness

These factors—combined with premium costs and policy type—help determine eligibility and offer value.

Why Choose LifeRoc For Your Life Settlement

As a licensed life settlement provider, LifeRoc helps policyholders quickly determine if their policy qualifies for a life settlement and how much it may sell for. LifeRoc’s large leading network of funders is well known for delivering great offers— and we eliminate 3rd party broker commissions, so 100% of the gross offer goes to you.

With more than $20 billion in face amount settled in our careers, and a reputation for exceptional service, LifeRoc is trusted by financial professionals and families nationwide. We strive to make the process smooth from start to finish.

Request a free, no-obligation policy appraisal today and discover which settlement option may be right for you.