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In viatical settlements (and in the early history of life settlement pricing), the life expectancy (9) of the insured was considered the most critical (often the only) variable used in determining the secondary market price of the policy as this represents the expected life length of the insured when the life insurance policy was sold to the third party as a life settlement (the time to payment for the investor).
Since the Salazars wanted a big percentage return but were too small for the risky real estate deals, and had too little tolerance for stock funds given the bubbles and serious market reverses of the last few years, Tom recommended they invest in a privately syndicated pool of life insurance policies in a transaction called a viatical settlement.
Court of Appeals for the Fourth Circuit ruled that the McCarran-Ferguson Act, a federal law giving states authority to regulate insurance matters, also covers viatical settlements.
Although anyone with access to the Internet can locate information on companies that provide viatical settlements, a client should have his or her attorney, accountant, financial planner, or a viatical settlement broker assist in the sale of the life insurance policy.
While most viatical settlement companies are legitimate, others mislead, deceive, or even defraud viatical investors.
Viatical settlements are becoming increasingly popular among seniors who require immediate cash for a wide range of needs.
Viatical settlements raise regulatory concerns under the insurance laws.
15) Therefore, the practitioner charged with assisting the personal representative must be cognizant of the Viatical settlement issues and thus make certain that the personal representative properly reports the Viatical settlements on the decedents final return.
The idea was to submit medical records that would suggest a short life expectancy, thereby justifying a higher viatical settlement.
The cap was instituted during the final stages of the legislation because Congress recognized the need to coordinate long-term care provisions with viatical settlements.
After all, viatical settlements entered the mainstream more than 20 years ago, with life settlements debuting 10 years after that.
With the NAIC's new model law criteria in place, much of the debate that preceded adoption of the revised Viatical Settlements Model Act had more to do with procedural questions.