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Author: fooldaveonce One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19483  
Subject: "Viaticals" Date: 9/28/2001 2:53 PM
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I have received information from U.S.-Financial Resources Inc. concerning its "Absolute Assurance Life Settlements" program. The company "guarantees" (through insurance by Lloyd's of London) both principal and profit (10.5% to 12.6% annual).
Basically, the company offers "insured return life insurance settlement," which means buying the beneficiary rights to a life insurance policy of someone whose life expectancy is between three and eight years.
Aside from the morbidity of the concept (the company says its program does good things for the near-dead by helping pay off medical bills or giving them one last fling), does anyone have thoughts on this?
The minimum investment is $10,000.
With CD rates in the 3% to 4% range and money market accounts in the tank, this sounds too good to be true.
Anyone have any comments -- especially anyone with experience with the so called "viaticals?"
Fooldaveonce








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Author: TheBadger Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7369 of 19483
Subject: Re: "Viaticals" Date: 9/28/2001 3:01 PM
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In the past there have been several companies "selling" this product with three primary difficulties: one, the reliability of the company; two, one was required to almost be doctor to accurately judge when the insured might die; three, high commissions.

I am not saying thee folks are not reputable; however, I would like to see & read the Lloyds policy (I am suspicious of guaranteed profit) and also who is the lead slip on the policy.

Send me a web address & I'll start investigating.

TheBadger


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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7370 of 19483
Subject: Re: "Viaticals" Date: 9/28/2001 3:03 PM
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Anyone have any comments -- especially anyone with experience with the so called "viaticals?"

For several years I did pro bono tax returns for clients of the AIDS clinic in Washington, DC. Many had received viatical settlements not long before the drug cocktails became available. All were still living long after the people who bought their policies thought they would be dead.

I'd be highly skeptical of anything that guarantees returns like you're talking about. At a minimum, I'd suggest you get confirmation of this "guarantee" from Lloyds.

Phil Marti

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Author: saml72933 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7371 of 19483
Subject: Re: "Viaticals" Date: 9/28/2001 7:02 PM
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fooldaveonce.

Sounds like you are about to become "fooldavetwice" <G>

Hope this helps.

Sam





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Author: wickert Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7645 of 19483
Subject: Re: "Viaticals" Date: 12/29/2001 2:24 PM
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Well Viaticals don't only deal with AID's patients. They deal with people with terminal diseases like cancer for example. They do have some AID's but they also have other terminal illnesses like cancer. There website is www.rhood.com I would encourage anyone with any interest in this to give them a call and at least ask them any question that you might have, they have nothing to hide and will tell you anything that you want to know as long as client confidentiality isn't comprimised. Thaey also rate the returns on there policy that even if the viators maturity date is extened to 20 yrs past original maturity date you will still make a profit even if it is only like 3.5 percent which is still better than a savings account. I invested about $5000 for an expected return in 2 years. The policy ended up maturing in aproximatly a year and a half and I ended up getting and 18% profit. check it out and give them a call. If you want to you can email me back.

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Author: gurdison Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7646 of 19483
Subject: Re: "Viaticals" Date: 12/29/2001 3:37 PM
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<They also rate the returns on there policy that even if the viators maturity date is extened to 20 yrs past original maturity date you will still make a profit even if it is only like 3.5 percent which is still better than a savings account.>



It is unfortunate that many people who feel that CD rates are too low end up being such easy targets for scams that always sound too good to be true. There have been many unscrupulous people and companies involved in viaticals. What keeps them going is that there are always individuals willing to be sucked in. I expect to hear many more stories of people who put their expiring CD money into questionable investments of all types.

I do not have a problem with the basic concept of a viatical. The problem comes in with the fuzzy math. If the person has a policy, they are given cash up front in return for signing over the policy. The company running the viatical gets huge fees regardless of what happens or doesn't happen. You can do well if the person dies on schedule or ahead of time. I find that part of it to be morally objectionable to me. I do not see how one can go 20 years past the expected death date and still have a positive ROI. I do not see how one can do it over 5 years. Much like annuities, the biggest benefit goes to the person selling it.


BRG


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