Complex Viatical Settlements Can Lead to Elder Fraud Concerns

Life insurance fraud can come in many forms, but at their core they incorporate financial vehicles designed to turn a profit on the investments held by the elderly.

One form of life insurance fraud is called “viatical settlement.” Questions about viatical settlements can cause problems for not just senior citizens but also advisers and investors.

What is a Viatical Settlement?

Put simply, viatical settlements function like reverse mortgages in that an older American turns down the promise of future money, whether the sale price of a house or the payouts defined by a life insurance policy, for the promise of an immediate lump sum. In the case of viatical settlements, people with terminal illnesses or those who do not have much time to live cash out a portion of their life insurance policy value and investors get to keep whatever is left.

Yet these amounts are set by an insurer’s actuary based on personal health considerations. Trying to dictate a return on investment based on life span can be tricky and making up any potential losses can be difficult, as a recent life insurance fraud trial indicated. The Miami Herald reported that investors were sold a false bill of goods to the tune of up to $1 billion.

Considering that many of the investors had been sold the securities based on alleged future performance, they were in the same boat as many elderly people who may have been harmed by life insurance fraud or issues regarding annuities. While on opposite ends of the deal, in both cases investment advisers allegedly did not warn their clients of the potential risks involved with these financial vehicles, according to many elder fraud lawsuits.

Help for Victims of Life Insurance Fraud

Elderly men and women, or those who care for them, may be able to pursue damages if they have been harmed as a result of annuities fraud or similar investments. Learn more about legal options by visiting the Life Insurance, Annuities Fraud Class Action Lawsuit Investigation today. While there, potential plaintiffs can get a no-cost legal consultation with one of our partner elder fraud lawsuit attorneys by filling out the case submission form. It is important for families to keep track of these financial transactions because they can be complex and assessing the fine print can be difficult. Get started today and learn what remedies are available.