What are the problems and risks associated with viatical investments?
There are a host of problems that have arisen with some viatical programs. They include Misleading Rates of Return: Viatical issuers also advertise to potential investors rates of return that are based on the full term of the investment, which is based on a supposition about the insureds life expectancy. If the insured lives longer than expected, the investors return is diminished accordingly. This significant caveat is not disclosed in advertisements. Misleading and Deceptive Advertising Claims: Recent ads placed by viatical issuers in Georgia newspapers promise investors returns of 36% to 90%. Some issuers also falsely claim that their products are 100 % secured, fully insured and bonded. In most instances bonds dont exist or are provided by sham bonding companies. Policy Lapse: Viatical issuers typically set aside enough money to pay policy premiums for the life expectancy of the insured plus a short time more. If the insured lives beyond this expectancy, the investor must make an a
