The Importance Of Life Insurance Policy

1989 Words 8 Pages
Down the hospital hallway there is a 45 year old man with a terminal disease expected to die within a month. To live an additional few months longer, he needs cash quick for a treatment. He owns an asset with substantial value, but he can only use it after death. How convenient for him. In 1911, the Supreme Court made it legal to sell this asset, to anyone who is willing to buy it (Grigsby v Russell… np). A life insurance policy is not commonly thought of an asset to be used while you are still alive; however, at certain times, a life insurance policy can have more value to someone while they are alive than as a death benefit gifted to another person later. Typically, young industries that experience rapid growth in a short time period, …show more content…
The dictionary defines viaticals as “of or pertaining to a form of insurance business that pays off on the insurance policies of the terminally ill”(viatical np). Terminally is the key part of how these businesses operate. When a viatical purchases an individuals life insurance policy from them, they give the insured a sum greater than the cash surrender value, and they agree to make the payments until the insured dies. This ensures that the policy stays in force. The viatical receives a return on their investment when the insured dies. When they buy the policy, they become the beneficiary allowing for them to collect on the policy. For a viatical company, the people who die sooner are better …show more content…
In a 2013 survey conducted for LISA, it was found that 55% of seniors had let their policy lapse because they viewed it as a liabilities instead of as an asset (History of Life Settlements n.p.). If these senior citizens had been informed that there was a way that they could get value from their policy they would be much more likely to keep those policies in force. This would also have let them get some benefit out of the policy that they had been paying for over the course of many years. In this situation, the industry would actually be helping individuals obtain some return on all of the

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