I came across a word that I hadn't heard of, and I imagine it will become more popular because of our aging population: viatical agreements, meaning investments in the life spans of old or dying people. Aging or dying people sell their life insurance to investors who pay them and then will be entitled to the full amount (minus any commissions) when the person dies.

"Viatical" comes from the Latin word "viaticus," meaning provisions for a long journey.

Have you seen this word used? Are these agreements becoming popular?

Worst Viatical Agreement Ever:

Apparently (I am retelling all this from memory; googling "oldest french woman viatical" didn't find anything) in France it is not uncommon for an individual to agree to take over the payments on an old person's apartment and in return receive the apartment the old person dies. The woman who would eventually become The Oldest Woman in The World had made this agreement with a forty-something Frenchman when she was seventy-something. He faithfully paid the rent on her apartment until his death 30 years later. I think she was 121 when she died.

I don't see the reason for this arangement. If I transfer my life insurance policy to someone who then takes over payments and collects on it when I eventually die, where is the profit to me? I assume a fee is paid to me by the investor? Sounds flakey.

Along similar lines, there was a story I read decades ago, long before the security paranoia hit its present fever pitch, about a man who was arrested in an airport for, I believe, "creating a general nuisance" since there was no law on the books at the time to cover what he was doing.

His scheme? He was going up to complete strangers in an airport and offering to buy flight insurance for them if they would name him as beneficiary. Since the guy himself freely admitted that he wasn't doing any of the flying, someone finally called the authorities. Planes were searched and no bombs or any sort were found. When asked why he was doing this, he replied "I just felt lucky today."


Isn't that a great story?

I don't see the reason for this arangement. If I transfer my life insurance policy to someone who then takes over payments and collects on it when I eventually die, where is the profit to me?
CJ, obviously, I hadn't heard of it. However, here is how the article described it:

"When executed honestly, the deals can benefit everyone involved. Policyholders gain a tax-free influx of cash that can be used to feather their last days in comfort, from dream vacations to new medicines. Investors can receive rates of return double or triple that of safer investments, such as certificiates of deposit or mutual funds. And the companies and brokers typically profit by taking a commission out of the money investors pay."

quote:

---

Originally posted by Chris J. Strolin:
I don't see the reason for this arangement. If I transfer my life insurance policy to someone who then takes over payments and collects on it when I eventually die, where is the profit to me? I assume a fee is paid to me by the investor? Sounds flakey.

---

Here's a scenario: say a few years ago I got married and bought a life insurance policy to take care of my spouse if I died. I recently got divorced and really don't care what happens to my spouse when I die anymore. I could cancel the policy, but I've already put money into it, so instead I say to you "Chris, I tell you what. You pay me 5 cents on the dollar of the total death benefit, and take over the payments, and I'll name you as the beneficiary." You look at me, taking into account the fact that I am recently divorced, drinking heavily, and will probably just blow the money on some stupid, dangerous toy like a motorcycle, and say, 'Sure'. I get some money out of my insurance policy, you get a windfall when I drive off a bridge. It's a win-win situation.

OK, I understand it better but it still sounds flakey.

It's a strange, strange world...