Viatical settlements are an investment opportunity for individuals.
This opportunity allows an investor to invest in another person's life insurance policy, typically when the holder of the policy has an estimated less than two years to live.
The initial sale allows an investor to purchase a person's policy for less than the death benefit of the policy but more than what has already been paid in premiums.
Once the investor purchases the plan, he or she is responsible for maintaining the plan and making any future payments on the plan.
While it may sound rather straightforward, there is often a lot of uncertainty concerning the return on investment.
This is because the event that allows the investor to be paid is death.
The return on investment depends on the seller's life expectancy and their actual date of death.
If the seller of the policy reaches an age less than the estimated life expectancy, the return on investment may be higher than was anticipated.
Unfortunately for the investor, if the seller lives beyond the age of the estimated life expectancy, the investor's return will most likely be lower than was initially anticipated.
In addition, it is possible to lose part of the principal investment if the seller lives so long that additional premiums are needed to maintain the policy.
Because of this, viatical settlements can be a risky investment.
The popularity of viatical settlements took off in the 1980s when the AIDS epidemic first hit the United States.
This is because the group that was hit hardest first was gay men.
This demographic did not involve a lot of individuals that were particularly old.
This group generally had life insurance policies through either their job or other investment activity.
In addition, they had no wives or children, who are the traditional recipients of life insurance policies.
The dependents for policies were generally the parents of the infected individual who were not dependent on money from life insurance.
Because the AIDS mortality was quite high and the life expectancy after diagnosis was quite short, investors were reasonably certain that they could collect on their investment in a relatively short time.
This caused a surge in the sale of viatical settlements as both investors and policy holders saw an opportunity to benefit from life insurance policies.
These settlements allowed life insurance policy holders an opportunity to extract the value of the policy while still alive.
Unfortunately, this area of investment eventually developed a bad reputation because the area frequently attracted seedy characters.
Also, there was often not enough emphasis placed on the concept that viatical settlements are not traditional investments.
This left many investors confused.
If you would like more information on viatical settlements and their successor life settlements, please visit http://www.
lifesettlementsandyou.
com/article_viatical_settlements.
aspx.
The experienced team will be more than happy to answer any questions that arise.
This opportunity allows an investor to invest in another person's life insurance policy, typically when the holder of the policy has an estimated less than two years to live.
The initial sale allows an investor to purchase a person's policy for less than the death benefit of the policy but more than what has already been paid in premiums.
Once the investor purchases the plan, he or she is responsible for maintaining the plan and making any future payments on the plan.
While it may sound rather straightforward, there is often a lot of uncertainty concerning the return on investment.
This is because the event that allows the investor to be paid is death.
The return on investment depends on the seller's life expectancy and their actual date of death.
If the seller of the policy reaches an age less than the estimated life expectancy, the return on investment may be higher than was anticipated.
Unfortunately for the investor, if the seller lives beyond the age of the estimated life expectancy, the investor's return will most likely be lower than was initially anticipated.
In addition, it is possible to lose part of the principal investment if the seller lives so long that additional premiums are needed to maintain the policy.
Because of this, viatical settlements can be a risky investment.
The popularity of viatical settlements took off in the 1980s when the AIDS epidemic first hit the United States.
This is because the group that was hit hardest first was gay men.
This demographic did not involve a lot of individuals that were particularly old.
This group generally had life insurance policies through either their job or other investment activity.
In addition, they had no wives or children, who are the traditional recipients of life insurance policies.
The dependents for policies were generally the parents of the infected individual who were not dependent on money from life insurance.
Because the AIDS mortality was quite high and the life expectancy after diagnosis was quite short, investors were reasonably certain that they could collect on their investment in a relatively short time.
This caused a surge in the sale of viatical settlements as both investors and policy holders saw an opportunity to benefit from life insurance policies.
These settlements allowed life insurance policy holders an opportunity to extract the value of the policy while still alive.
Unfortunately, this area of investment eventually developed a bad reputation because the area frequently attracted seedy characters.
Also, there was often not enough emphasis placed on the concept that viatical settlements are not traditional investments.
This left many investors confused.
If you would like more information on viatical settlements and their successor life settlements, please visit http://www.
lifesettlementsandyou.
com/article_viatical_settlements.
aspx.
The experienced team will be more than happy to answer any questions that arise.