Viaticals
Viaticals are complex investments whereby viaticals investment companies sell interests in the life insurance death benefits of terminally ill patients. The insured person receives a discounted percentage of the death benefits in cash so as to allegedly improve the quality of life in his/her final days. Investors are often promised significant returns on their share of the death benefit when the insured dies, less a brokerage fee. Some viatical investments operate as fraudulent ponzi schemes. If promoters of the investment mislead investors about the insured’s medical prognosis, or divert monies for their own use, investors can lose their entire investment. In several cases that have been prosecuted, investors were asked to pay premiums on the policy for extended periods beyond that originally stated in the “contract”, while the promoters took those funds to buy themselves luxury items such as homes and boats. Even the legitimate viatical investments carry extremely high risk, particularly for seniors.