Common Terms and Parties In Viatical Settlements

It is important that you understand more about viatical settlements in Florida and who the people who may be involved in the transaction may be.

Viatical Settlement Rules And Regulations

At one time use of a viatical settlement was limited to people who had been diagnosed with an illness that meant they would be deceased within twenty four (24) months, although today, this is no longer the case - today regardless of our health or your age, you can legally viaticate your life insurance policy in Florida. Because of the high risk of fraud (which cost investors up to 2 billion dollars in losses since 1996) new laws make these settlements subjected to Florida's Security Laws. All investors (and sellers) must be given full disclosure of every aspect of any transaction.

The primary parties involved in viatical settlements include:

Beneficiary - Any person who has an expectation of financial gain from a life insurance policy. In a viatical settlement, this may involve one or more investors, and they may earn this designation irrevocably meaning it cannot be changed without their written permission.

Dealer - Any company that is offering, buying, selling or dealing in any security including viatical settlements. Typically a dealer will have employees who are engaging in the sale of securities which may be issued by any issuer and are duly compensated by the issuer.

Insured - Any individual who has their life insured by any insurance policy. It is critical to understand that the insured person may not be the same as the person who actually is designated as a policy holder.

Issuer - Any entity or person who has issued, proposes to issue, may issue any interest in a life settlement (or viatical) policy. The person who is soliciting business from investors of viatical policies may also be considered an issuer in some instances.

Investor/Purchaser - Any person or entity who purchases one or more viatical (life settlement) investments is considered to be an investor or a purchaser.

Policyholder - The policy holder (who is not necessarily the insured person) owns the legal right to name beneficiaries, and controls ownership and has the right to sell the policy.

Viatical Settlement Broker - Any firm or person who is duly licensed by the Florida Department of Financial Services who offers to attempt to negotiate a settlement to a policy holder (who resides in Florida) and a settlement provider. They must represent only the interests of the policy holder and not the provider.

Licensed Life Insurance Agent - Some Life Insurance Agents who are allowed with proper appointments from a viatical settlement providers and being duly licensed to sell insurance in Florida - who is allowed to negotiate settlements without a separate viatical settlement broker's license in Florida.
Viatical Settlement Provider - Any Company or individual who is properly licensed by the Florida Department of Financial Service who purchases beneficiary rights or policy ownership from a policy holder. These companies or individuals may either hold the rights of ownership or may assign those rights to one or more investors.

Viator - The policyholder or policy owner whether the owner of an individual policy or a group policy who has entered an agreement to sell that policy.

Terms you should be aware of:

Viatical Settlement - A payment that is issued which is generally a percentage of the policy's face value, licensed provider offers a negotiated payment.

Viatical Settlement Contract - An agreement that is entered into by the person identified as a policy holder and the provider of the viatical settlement. This contract establishes all of the terms and conditions of the settlement.

Viaticate - The process of selling a life insurance policy to a third party for less than face value.