Life & viatical settlements in Illinois

How life settlements work in Illinois

Life and viatical settlements in Illinois are regulated under 215 ILCS 159. The Illinois Department of Insurance licenses both viatical providers and brokers, and requires written disclosures, a 15 days rescission period, and standardized contract forms.

For cancer patients in Illinois, the most common path is a viatical settlement under IRS §101(g), where proceeds are tax-free at the federal level if you’re certified as terminally or chronically ill. Illinois conforms to federal tax treatment for these settlements.

Medicaid impact in Illinois

Illinois’s Medicaid asset limit is currently $17,500 for individuals (2026). A lump-sum settlement that exceeds this limit can disqualify you from coverage. Specialized trust structures (special needs trusts, pooled trusts) can preserve eligibility but must be established before proceeds arrive.

This is the single most important planning step for Illinois patients receiving a settlement. We’ll connect you with a Illinois elder law attorney if you’d like guidance.

What’s different about Illinois

• Rescission period: 15 days from contract signing to change your mind
• Required disclosures: Buyers must provide written disclosures including alternatives (loan, surrender, ADB rider)
• Privacy: Medical and policy information is HIPAA-protected throughout
• Tax treatment: Illinois follows federal §101(g) for viatical proceeds

Major Illinois cities we serve

Statewide. Our licensed specialists work with policies throughout Illinois, with no in-person meetings required. Documentation, signatures, and notarization can all happen remotely.