The sale of a life insurance policy before the death of the insured is a viatical. An investor who buys a viatical purchases the right to receive all or a fractional portion of the death benefit from a life insurance policy insuring someone else’s life. These contracts are also known as “life settlement” contracts. The seller (policyholder/insured) receives a cash payment during his lifetime of less than the policy’s death benefit. The investor/buyer then receives the right to payment of the death benefit at the insured’s death.

Pitfalls inherent to viaticals/life settlement contracts include: the risk that the insured will live longer than expected (potentially increasing the amount of premiums that must be paid to keep the policy in force, and decreasing the rate of return); the risk that the death benefit will not be paid at all (because the policy has lapsed for nonpayment of premiums, the insurance company fails, or there was fraud in obtaining the policy); and the risk that the company or advisor selling the viaticals is operating a Ponzi or other fraudulent scheme.

The investment and securities fraud attorneys at Moulton, Wilson & Arney, LLP have extensive experience representing individual investors in securities arbitration and litigation. Cindy Moulton, Michael Wilson and Lance Arney have successfully represented thousands of clients in securities and investment fraud cases, with combined claims of hundreds of millions of dollars.

If you have suffered an investment loss in a Life Settlement Contract or Viatical, you may be entitled to recover all or part of your investment.  

Contact Moulton, Wilson & Arney, LLP for a free initial consultation.