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.
References in periodicals archive ?
Transparency is not great in this market and so it's difficult to determine the price of these transactions, the actual returns that investors are going to receive, and the returns that an end policy owner receives as opposed to what's received by the brokers or life settlement providers or investors.
The Conning report observes, too, that the industry's stakeholders -- investors, life settlement providers and brokers -- are getting better at pricing the transactions.
In 2013, the top 15 life settlement providers paid more than $362 million for unwanted life insurance policies valued at over $2.
Released in 2010, ILMA's "Life Settlement Provider Best Practices" is a guide of minimum compliance and diligence procedures for life settlement providers.
Some life settlement providers have created such arrangements that make it easier for agents to offer life settlements with less burdensome paperwork.
com, Eric Smith, had this to say of life settlement providers offering money for your life insurance policy with few questions or underwriting, “If a company, or life settlement broker, is willing to offer you an immediate amount of money for your life insurance policy without knowing much of anything about your health, then you are likely looking at a very poor offer.
Statewide, there are 16 approved life settlement providers.
Life settlement brokers represent policy owners for a fee or commission and may solicit bids for policies from multiple life settlement providers with the goal of obtaining the best price.
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.
All licensed life settlement providers must file annual statements with the Superintendent on or before March 1st.
My hope is that the new task force will determine that greater regulation by the agency is necessary for life settlement providers and brokers.
Typically, the life settlement broker will provide this information to the life settlement providers from which the broker seeks purchase bids for the life insurance policy sought to be sold.