Proceeds of a viatical settlement contract are subject to the claims of which entities?

In the context of viatical settlement contracts, proceeds from such settlements are indeed subject to the claims of creditors. This means that if an individual who has entered into a viatical settlement owes money to creditors, those creditors can make a claim against the money received from the viatical settlement.

Viatical settlements typically involve the sale of life insurance policies by individuals who are terminally ill, allowing them to access funds that would otherwise be paid out only upon their death. While the contract may provide financial relief to the policyholder, it does not shield those funds from being claimed by creditors. This aspect is vital because it underscores the financial responsibilities and potential obligations an individual may have even in the face of life-altering circumstances.

Beneficiaries typically do not have claims against the proceeds from a viatical settlement in the same manner, as the funds are designated for the seller of the policy. Insurers are also not claiming against these funds, as they are not parties to the settlement itself but rather to the original insurance contract. Regulatory authorities may oversee and regulate the industry to ensure compliance with laws, but they do not have a claim on the proceeds of the settlements. Thus, creditors are the only entities that can assert claims against the