We're seeing a big swing back to buying viaticals
. I was somewhat torn when the association decided to remove the word viatical
from the name.
(1) The market began with policies on individuals with less than 2 years of life expectancy (called viaticals
) and grew to include those with more than 2 years of life expectancy (life settlements).
According to the report, NASAA regulators pursued actions against companies that improperly sold variable and indexed annuities, hedge funds, life settlements/ viaticals
and structured products, among others.
This situation harkens back to the 1980s and the origins of viaticals
, when investors bought policies to help AIDS patients handle costs for their medical care and living expenses for the last year or so of their lives.
He spoke of how at the turn of the century life settlements were still trying to escape the shadow of viaticals
and become their own unique asset class.
It works like this: Bankers buy up the life settlement insurance policies that the sick and old sell for cash before the policy matures (popularized in the 1980s as "viaticals
"), then "securitize" them by packaging hundreds or thousands together into bonds.
(96) Life settlements and viaticals
can be useful tools for people struggling with expensive illnesses or tragedies insofar as they allow people to obtain money by selling preexisting policies that they no longer need.
* "1999 Viatical
Settlements--The Emerging Secondary Market for Life Insurance Policies": "Conning's first report on the viatical
and life settlement industries examines the characteristics of the three viatical
markets and future prospects for each, the keys to success for settlement companies, insurance industry response and consumer/investor attitudes toward viaticals
A life settlement is not a viatical
are purchases of policies of the terminally ill with a life expectancy of two years or less.
is a way for terminally ill patients to get the benefit of life insurance proceeds before death by selling the beneficiary rights at a discount.
(10.) Lisa Karam Middleton, Death Watch: Viaticals
Under Fire, available at http://www.
On August 17, 1999, the cases filed by the department were mutually resolved resulting in a final order to cease and desist the solicitations of investors of viaticals
that offered 10 percent monthly income programs and that offered a lump sum interest payment in the event an insurance policy did not mature within a period of time (for example, 15 percent interest paid at the end of a 36-month contract period in the event the terminally ill insured person did not die within the 36 months covered by the investment contract).