A Life Insurance policy is a contract between the buyer and the seller of the policy. There are many companies selling policies and a buyer has to scout around, research and search for the best insurance policy company. Life insurance generally is the lump sum given to the heir or the nominee of the insured person after he dies and the nominee has filed a legitimate claim. Others can contest this claim and then the claimant has to prove that he or she is the rightful one with adequate proof.

But in some conditions or in some special cases, it is possible to get the lump sum or part of it by the policyholder before he dies. This is if the insured person has terminal illness and he needs the money for payment of medical bills. In such cases the patient has to prove with medical evidence that he is indeed suffering from the terminal illness and he has a certain short period of life only. In such cases if the doctors can give medical certificate saying that the patient has only a few days of months to live and that he is suffering from an incurable disease, then the Insurance Company may release funds to settle the medical bills, to buy medicines or pay for the hospital stay.

Sometimes some companies incorporate ‘living benefit’ condition in the policy whereby a certain sum is paid to the insured person when he is alive. This provision may be inbuilt in the policy or may be presented as a rider. The full amount of the policy may not be paid and only a smaller amount may be paid. Then the heirs or the nominees of the person will get a smaller amount after his death.

There is another way, which is called the Viatical Settlement. This is a contract to sell the Life Insurance policy to another unrelated person who becomes the proprietor and the beneficiary of the policy. Actually it is against the law for an outsider to buy a policy on any one else’s life. And if he does, he can easily have an ulterior motive of collecting the money by murdering the policyholder and filing a claim himself for the policy amount. However a policy is like any other buyable and saleable thing. If a person has it he can sell it to anyone he likes when he is in need of money. A perfect stranger will have no plausible insurable interest, it is believed. If the policyholder sells the policy to another person in times of need, then the other person becomes the policy proprietor and can name himself as the beneficiary and collect the amount.

There are certain companies and firms who specialize in viatical settlements. The company buys the insurance policies from people with incurable and/or terminal illnesses and sells them to financiers. The patient who was the policyholder gets the money while the buyer becomes the policyholder. It is possible to get insurance money when one is living but one has to be careful and do nothing which is illegal.