Viatical settlement involves the selling of the life insurance policy of a terminally ill person, whose life expectancy has been predicted to two years or so, to any unrelated investor. The investor buys the policy at a reduced rate based on the actual face value of the policy and then collects the benefits after the demise of the original policyholder. The longer the life expectancy, the lower the returns. This gambling on death may sound disconcerting to many but if the transaction is carried out fairly, the settlements can provide financial relief to the person who is already undergoing the physical and emotional trauma of a terminal illness. To ensure that the transactions are fair and that the patients do not fall prey to the pressure tactics of unscrupulous elements, the Viatical and Life Settlement Association of America (VLSAA) came into being.
The VLSAA is a non- profit trade association formed to promote the integrity, reputation, and development of the settlement industry. It has on its roles consumers, member companies, regulators and legislatures, and is considered the ultimate authority in the settlement industry, complying all rules and regulations such as the applicable laws, anti-trust laws, federal, state and local laws and all trade regulation and legal requirements.
One of the main aims of the association is to provide complete information to the consumers thereby creating awareness amongst them. Well-informed consumers can then get competitive market rates for their policies.
A consumer can go through the VLSAA website to hunt for relevant information. They also have their contact number listed and a person can call their office to get the queries answered.
The VLSSA also provides referral services. The organization has a list of member companies known to maintain high ethical standards. This ensures that no vulnerable person gets cheated in the deal.
The VLSSA also has the authority to identify whether the deal is a regulated transaction, as per the laws of the state. This is extremely important because companies or brokers dealing in viatical settlements need to be licensed and a consumer has the right to check the license before entering any transaction.