Viatical is the sale of a life insurance policy by an individual who is terminally ill to a third party, in return for a percentage of the face amount of the policy. A "viator" is the person selling the policy, and the process is known as "viaticating" of the policy. People take part in viatical settlements because they cannot afford their life insurance premiums, or they need some extra money to cover their expenses. If you are facing either of the situations mentioned above, a viatical settlement may be right for you. Viatical settlements began taking the form of an industry only in the mid-1980s, although selling a life insurance policy to a third party is not a very recent development. The onset of the AIDS epidemic created a niche for this market. Although the scheme developed to help people with AIDS, it has since been extended to any terminally ill person needing money. Some of the other diseases that are considered potential sources of viatical transactions are cancer, cardiovascular disease, and Alzheimer's disease. The technique can bring valuable benefits, but unscrupulous operators sometimes take unfair advantage of sick people. There are always ethical implications when health organizations or doctors become involved. One who has purchased the policy is actually betting on how long the seller will live, since he has to continue to pay the premiums until the seller of the policy dies. So some people have aptly named these buys "death futures." As a result of extensive marketing campaigns and aggressive recruiting practices, advisors and consumers are becoming increasingly aware of this product, both as a planning option and as a potential scam. But some surveys show that the popularity of this scheme has begun to wane, as the treatments for AIDS have begun to show a certain degree of success, thus increasing life expectancy. |
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