VIATICAL & LIFE SETTLEMENTS CONSUMER INFO

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Risks for Viators

A man who was on disability leave from work wondered if he could work part time for his brother without losing his disability benefits. When I asked about his former employer's benefits, he praised the company's health plan but worried about paying the premium. That was the reason he wanted to work part time. Then I asked about his employee group term life insurance. He was insured for $350,000.

Term insurance has no cash value. He was told by the employer's Human Resources rep. that he would have to convert the term to an individual policy, if he wanted to keep his life insurance. When she told him the premium, he nearly fainted. "I can't afford that," he said.

"I know," she said. "That's what everyone says."

David let the policy go. The Human Resource specialist didn't know there were alternatives -- and there are several. Insurance companies offer alternatives for people who can't afford to maintain their current policy. Additionally, the Human Resource specialist didn't know about insurance company alternatives or viatical settlements -- the choice of last resort if no other alternative is as good.

It was too late to help David. He had left work four months earlier and with that, lost his life insurance.

	Risk Number One: Listening to nay-sayers.
	Risk Number Two: Allowing your life insurance to lapse without talking to at least 3 people who should be able to give you a total of 5 alternatives.
	Risk Number Three: Allowing your life insurance to lapse without talking to the insurance company's client services department, to learn if there are alternatives.
	Risk Number Four: Selling your policy to a viatical company without checking to find out if the company is licensed.
	Risk Number Five: Selling your policy to a company that promises to pay installments to help you avoid taxation. (What if the company goes out of business and can't pay you the full amount?)
	Risk Number Six: Selling to a company referred by your doctor, lawyer, insurance agent, benefits counselor, credit union, teacher association . . . . Why is this a risk? First, you should check to be sure they are licensed. Second, you should not sell to the first company that rings the bell. If you offer your policy to five or 6 viatical providers, you are guaranteed to get thousands of dollars more.

Think of it this way: If you were selling a car that you knew was worth $10,000, would you sell it to the first person who answered your ad? He might offer $5,000 -- or less, if he knew he was the first to place temptation under your nose. Why not let a few people get excited about your car, and fight -- with dollars -- to own it?

See Cash for the Final Days for details about these and other risks. The book is out of print but available through many libraries. Additionally, you can email the author if you have questions.

© 1998 - 2011 Bialkin Books, publisher of viatical books banned in Texas and Florida
(at the behest of companies that consider informed consumers dangerous to their bottom line):
Viatical Litigation: Principles & Practice - the first legal text on the industry
Viatical & Life Settlements: An Investor's Guide
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