About Viatical Settlements and Senior Settlements

Buying a Viatical or Senior Settlment

Buying a viatical is purchasing the life insurance policy of a terminally ill person with less than a few years to live - at a substantially discounted price. Most times, the purchase is made through a broker, sometimes a trusted insurance agent, without the buyer ever meeting the ill person.

Why Buy or Sell a Viatical / Life Settlement?

The ill person gets needed money to help pay expenses and the investor gets the full face value of the policy when the person dies. For example, the ill person has a life insurance policy that will pay $100,000 after death. The investor buys the policy for $50,000, the ill person gets $25,000, the viatical broker gets $25,000, and when the person dies, the investor receives the full $100,000. Sounds good, but is it? (see Viatical Benefits)

Many viatical firms frequently try to convince investors that an investment in a viatical is "guaranteed" because everybody dies. We'll that sounds pretty obvious right?

But that is not the proper way to measure the worth of any investment, even a viatical settlement. What is not guaranteed is the date of death of the insured person (viator). The return on a viatical settlement (Viaticals) is completely dependent on when the viator dies. At a minimum, you should expect to have your principal returned with the additional amount promised by the viatical company, but that is hardly the same as saying that your return is guaranteed as of the projected date.

For more information on senior settlements, finding out what is a senior settlement, or learning about death benefits follow those links.