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

LPI featured in Joseph Belth's "The Insurance Forum"

The Feb. 2000 issue of The Insurance Forum focuses on regulation of viatical settlements, and the pivotal role played by lawsuits in which Life Partners, Inc., of Waco, Texas, was the plaintiff or the defendant.

Joseph Belth, who has unimpeachable credentials, criticizes the press release LPI issued after its lawsuit against LINA, but he does this with more finesse and tact than Gloria Wolk.

He refers to the press release as "an expansive interpretation of the opinion handed down by the Fifth Circuit Court panel," and goes on to give considerable attention to the Court's determination that this opinion should not be published nor used as precedent.

Belth notes that, contrary to the press release, the Court "did not mention the Constitution or the Commerce Clause, and did not say that a viatical firm can purchase policies in any state without a license." This issue of "Forum" includes a copy of LPI's press release and a copy of the unpublished opinion in the LINA case, so that readers can judge for themselves.

One interesting detail is that the LPI suit against LINA was based on LPI's efforts to buy a group term life policy with a death benefit of $130,000, for which they paid a pittance --  $45,000. That is 35% of the death benefit. Premiums were waived on the policy, since the insured was totally disabled.

What possible reason could have led John Maroney, the viator, to sell for so little?

One can only guess:

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Maroney knew nothing about viatical settlements.

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Maroney was unaware that New York, where he resided, had a viatical licensing law designed to protect people like him.

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He was desperate for cash and did nothing to learn about the risks of dealing with unlicensed companies.

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He probably was not aware of the warning in a pamphlet published by the NY Bar Association:

"Despite regulation, New York residents still get offers from viatical settlement companies that have failed to comply with New York regulation. It is wise to have an attorney review your viatical settlement arrangements. Federal tax law recently made such payments tax free in limited circumstances if received after December 31, 1996. Amounts received by New York residents from viatical settlement companies not registered in New York are subject to federal income tax."

Reprints of Belth's 12-page report ($10 each) can be ordered by phoning 812-876-6502. 

 

© 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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