VALUATION VS. VIATICAL
The life settlement market grew out of the viatical settlement market that developed in the early 1990's to provide cash to needy AIDS patients. The viatical business received some well-earned bad press, so it is important to distinguish the modern life settlement business from its viatical ancestors. The early viatical businesses too often matched desperate AIDS patients with unsophisticated individual investors. Much has changed, most importantly, the funding sources. Life settlement investors are largely institutional funders-insurance companies or banks-all performing extensive due diligence. Today's life settlement companies look at the investment much like insurance company's regard their annuity business, just another actuarial job. The policies are held in trust and the anonymity fo the insured is assured. |