At that time, the mortality rate from AIDS was very high and life expectancy after diagnosis was generally short.  Investors were pretty sure they would collect in a relatively short period of time. This combination of events has led to an increase in viatic settlements, as investors and viators have seen an opportunity for mutual benefit. There are several points to consider before deciding on a viatic settlement or life regulation: Connecticut has taken steps to regulate viatic settlements in accordance with Connecticut`s General Statutes, Section 38a-465, et.seq. Viatical Settlement`s companies and brokers must be licensed and the Insurance Commissioner must approve the contracts and forms used. In addition, the seller of a life insurance policy has certain rights, including the written disclosure of certain information before the execution of the sale, the confidentiality of personal data provided to buyers and the right to withdraw the sale within 15 days of receipt of the product from the settlement. The Supreme Court`s decision established the basic principle on which the viatic settlement and later the life insurance industry were based: life insurance is private property that can be transferred according to the will of the owner.  Viatic colonies were rare for nearly eight decades until the outbreak of the AIDS epidemic.  A viatic settlement is an agreement whereby a person who is incurable or chronically ill sells their life insurance policy at a discount to its face value for loan money. In return for the money, the seller of the life insurance policy waives the right to leave the death benefit of the policy to a beneficiary of his choice. A viatic settlement (from the Latin “viaticum”) is the sale of a policyholder`s existing life insurance policy to a third party for more than its cash value, but less than its net death benefit.  Such a sale offers the policyholder a lump sum.
 The third party becomes the new owner of the policy, pays the monthly premiums and receives the full benefits of the policy upon the death of the insured.  Despite the bad experiences of some investors, viatic settlements often remain a valuable tool for the personal financial management of many sick people. A 2002 study showed that among palliative care financial advisors who have experience with viatic facilities, most report positive experiences.  The first inappropriate activities among a few bad actors led to a fear of viatic billing among consumers.  [Wiesel Words] Life insurers were concerned that individuals would buy policies solely for speculative purposes.  Today, many states regulate life and life insurance, and many others develop laws and regulations.  As of June 2011, the states that do not regulate viatical establishments are Wyoming, South Dakota, Missouri, Alabama and South Carolina.  All other states regulate viatic colonies.  People with an incurable disease often face very difficult financial decisions.
Selling an insurance policy through viatic billing is an option that can be used to provide money to cover current medical and living expenses. Like life insurance statements, viatic settlements involve the sale of a life insurance policy to a third party. In exchange for an updated cash payment to the seller, i.e. a reduced percentage of the death benefit, the buyer becomes the new owner and/or beneficiary of the life insurance policy, pays all future premiums and receives the full death benefit upon the death of the insured. A 1911 U.S. Supreme Court decision provided the legal basis for viatic settlements.  In Grigsby v. Russell, 222 U.S. 149 (1911), Dr.
A. H. Grigsby treated a patient named John C. Burchard.  Mr. Burchard, who needed specific surgery, offered to sell Dr. Grigsby his life insurance policy for $100 and agreed to pay the remaining premiums.  Dr. Grigsby agreed and, as a result, the first viatic settlement transaction was created.  When Mr.
Burchard died, Dr. Grigsby tried to collect the benefits.  An executor of Burchard`s estate challenged Dr. Grigsby in the Court of Appeal and won.  The case eventually reached the U.S. Supreme Court, where Justice Oliver Wendell Holmes Jr. rendered the court`s opinion.  It stated in a relevant section that, for example, a life insurance policyholder may be able to access a portion of the present value to meet its immediate needs as long as the policy remains in effect for beneficiaries. It may also be possible to use the present value as collateral for a loan from a financial institution. “To the extent that adequate security permits, it is desirable to give life insurance the ordinary characteristics of the property.
The denial of the right to sell except to persons who have such an interest means significantly reducing the value of the contract in the hands of the owner.  When considering life insurance, a life insurance policyholder should first consider all available options to get the money they need. There may be a better way to use a life insurance policy. Viatic settlements allow life insurance policy owners to sell their policies to investors. Investors buy all or part of the policy at a lower price than the policy`s death benefit. The investor`s return depends on when the seller dies. The yield is lower if the seller exceeds his estimated life expectancy. Conversely, the return is higher if the seller dies earlier than expected. Two options you should always consider before selling your policy are to use a present value of the policy and to operate an accelerated death benefit plan (ADB).
If your policy is a lifetime policy or a policy with an investment feature, you may be able to get a loan for cash value to meet your immediate needs and keep your policy in effect for your beneficiaries. You may also be able to use the present value as collateral for a loan from a financial institution. If your policy includes an accelerated death benefit, it could pay you a significant portion of your policy`s death benefit and you would avoid having to sell the policy. A life insurance policy is the sale of a life insurance policy to a third party. The owner of the life insurance policy receives money for the policy. The buyer becomes the new owner and/or beneficiary of the life insurance policy, pays all future premiums and receives the full death benefit upon the death of the insured. Healthy people choose to sell their life insurance policies for many reasons. Some of the most common are: changes in the financial needs of loved ones, the desire to eliminate or reduce premium payments, or the need for money to cover expenses. Policies can be sold directly to a business or through a broker working for you and lifetime “comparators” or viatic billing offers.
The buyer pays a commission to the broker when the sale is completed. Viatic colonies gained popularity in the United States in the late 1980s, when the AIDS epidemic reached its peak.   The first victims of AIDS in the United States were mostly gay men, usually relatively young and without women or children (the traditional beneficiaries of a life insurance policy), but often covered by life insurance through employment or as a result of an investment. The beneficiaries of the policies were often their parents, who did not need the money. Viatic settlements offered a way to extract value from the policy while the policyholder was still alive.  The two main categories of insurance policy sales are life insurance statements and viatic settlements. A life insurance policy is different from a viatic settlement because the insured of a life insurance policy is generally in good health, while a subscription statement refers to a sale by an insured with an incurable illness. One of Viaticals` most notorious cases involved the Mutual Benefits Corporation, led by Peter Lombardi in Florida, which had 28,000 investors and focused on paying HIV-positive customers. In 2004, the Securities and Exchange Commission shut down the company, claiming it was involved in a $1 billion Ponzi scheme. .