Viatical & Life Settlements
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(not the actual cover)
 Back Home Up Next

In sympathy
  with people
from 86 nations
  who lost loved ones
on 9-11

Risks for Viators
 

A tax client I had known for 5 years phoned for advice. He was on disability leave from work and wondered about working part time for his brother. When I asked about his former employer's benefits, he praised the company's health plan but worried about paying the premium. Then I asked about his employee group term life insurance. He was insured for $350,000.

The Human Resources rep. told him that he would have to convert 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."

And that was that. David let the policy go. The Human Resource specialist didn't know of alternatives -- and there are several that insurance companies offer, when people can't afford to maintain their current policy. The Human Resource specialist didn't know about Viatical Settlements -- the choice of last resort  if no other alternative is as good.

I couldn't help David. He had left work four months earlier.

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Risk Number One: Listening to nay-sayers.

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Risk Number Two: Allow your life insurance to lapse without talking to at least 3 people who should be able to give you a total of 5 alternatives.

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Risk Number Three: Allow your life insurance to lapse without talking to the insurance company's client services department, to learn if there are alternatives.

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Risk Number Four: Sell your policy to a viatical company without checking to find out if the company is licensed

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Risk Number Five: Sell your policy to a company that promises to pay installments to help you avoid taxation

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Risk Number Six: Sell 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. 

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© 1998 - 2008 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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