Final answer:
The primary difference between a viatical settlement and a life settlement is that viatical settlements specifically apply to individuals with a terminal illness, whereas life settlements generally apply to individuals who are age 65 or older and have a specific life expectancy.
Step-by-step explanation:
The primary difference between a viatical settlement and a life settlement is that viatical settlements specifically apply to individuals who have a terminal illness, while life settlements generally apply to individuals who are age 65 or older and have a life expectancy of 2-12 years.
Viatical settlements allow individuals to sell their life insurance policies to a thirdparty for a lump sum payment, providing them with immediate cash to cover medical expenses or other needs during the terminal illness.
On the other hand, life settlements involve selling a life insurance policy to a third party for a lump sum payment, which can be used for any purpose the seller chooses.