Viatical Settlement Company

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Viatical Settlement Company

A company to which a life insurance policy holder sells his/her policy in exchange for a lump sum. The situation occurs when the policy's fair market value exceeds the cash surrender value that the insurer offers. The viatical settlement company must abide by applicable regulations, which, in the U.S., are set by individual states. The viatical settlement company becomes the policy's new beneficiary, is responsible for maintaining premiums, and, upon the death of the insured person, receives the benefit. The secondary market for life insurance began growing in the last part of the 20th century. The viatical settlement company is speculating on how long the insured person will live; indeed, it is in the company's financial interest for the insured person to die as soon as possible. A viatical settlement company is also called a life settlement provider.
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The New York Insurance Law requires that life settlement providers and brokers provide consumers with an informational booklet that explains what a life settlement is, advocates that consumers consider all of their options and offers tips and questions to ask.
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In life settlement contracts, investors buy from life settlement providers insurance policies from policy owners for cash, ultimately receiving the policy benefits when the insureds die.
Do agents owe clients fiduciary duty?
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