Posted by Ben on November 14, 1998 at 09:36:12:
In case anyone is following this thread, I just learned that the escrow agent for Alpha Capital had a cease and desist order placed against him in Missouri, allegations of material misrepresentations etc. Their application is now in my garbage in between a diaper and coffee grounds. (Stinkier than the diaper!) A close call narrowly averted! Anyway John, you said when I was ready for the next step to let you know.
Let’s hear it!
Ben
Viaticals - Posted by Ben
Posted by Ben on November 10, 1998 at 20:34:30:
I have had my interest piqued by a relatively unknown
albeit morbid, investment vehicle known as viatical settlements. In essence, an investor purchases the life insurance policy of a terminally ill person at a substantial discount of face value. When the policy matures (i.e death) the investor receives face value. This could amount to a pretty significant return on investment without a tremendous amount of risk. It also provides funds to the ill person who requires medication, etc. Is anyone familiar with this form of cash flow? I would be interested in your experiences.
Ben/NJ
Re: Viaticals - Posted by Steve Cremeans
Posted by Steve Cremeans on December 07, 1998 at 20:32:01:
I am interested in info as an investor of a viatical
as to the tax liability of the settlement when the
viator dies. Is all the monies received from the
insurance co. tax free?
A very big business - Posted by John Behle
Posted by John Behle on November 11, 1998 at 15:07:26:
Viaticals is a very thriving business. There are many companies that work with brokers and a few to avoid. There are many state laws that have tried to prevent the sale of viaticals, yet these companies have worked out the details. If you find any, let me know and I’ll give you the next step.
Caution - Viaticals is not an investment for a beginning note investor. There are some extremely important legal aspects that a small investor usually is not prepared for.
Re: Viaticals - Posted by MichaelR (NoVA)
Posted by MichaelR (NoVA) on November 11, 1998 at 09:54:47:
Ben,
There is a company that advertises every month in the Robb Report (recently) that specializes in this. I really don’t know anything about it, but if you get the magazine and contact them I’m sure they have some type of information package to send to you.
Hope this helps…
Michael
Re: A very big business - Posted by Ben
Posted by Ben on November 11, 1998 at 19:29:28:
Thanks for the responses. I have found some helpful
sites chock full of information. One is the Viatical
Association of America, a trade organization whose members agree to engage in dignified and ethical business practices… Another is run by Gloria
Wolk, an author devoted to exposing scams perpetrated by viatical companies. With the help of these sites, I have narrowed my search down to two companies, Legacy Capital and Alpha Capital, both located in New York. The major risks as I see them
involve the paying of premiums. However,Alpha states that the investor will never have to pay
premiums even if the viator long outlives his/her life expectancy. Legacy is not so generous stating that
premiums equal to double the life expectancy are escrowed, but after that the investor must pick up premiums or the policy will lapse. What I found unfair
about both companies is that if the viator dies before his estimated life expectancy, the extra premium money reverts to the company, not the investor.It seems like they are taking the best case scenario,(if the viator dies very soon after the transaction is made, a windfall in annuallzed return occurs), for themselves. If I am misinterpreting this please let me know. Also if you are aware of other risks, I would appreciate hearing about them. Thanks.
Ben