History of Life Settlements and Viaticals

Although many people look at the life settlement market today as a relatively new, robust and growing market, its origins go back well over 100 years.

In fact, it’s unlikely the market would have developed as it has if not for some of these events and people. The great Supreme Court Justice Oliver Wendell Holmes rendered an opinion in the 1911 case of Grigsby v. Russell that established life insurance policies as a saleable asset. His opinion established the view that life insurance policies held the same rights of transferability as stocks, bonds, and the like. They were to be treated as property and the owner was to be accorded free and unfettered rights to transfer ownership as he willed.

That case outlined other rights for policyholders. It established a policy owner’s right to name and change a beneficiary; use the policy as collateral; borrow against the policy; and, most germane to the life settlement industry today, it entitled the owner to sell his policy to another party.

Another critical and important juncture for this industry was the release by the National Association of Insurance Commissioners (NAIC) of the Viatical Settlements Model Act in 2001. This Act set down guidelines to avoid fraud and other unethical business practices.

This Act signaled the maturing and mainstreaming of this investment vehicle. Many of today’s largest life settlement providers had begun around that time to purchase large volumes of life insurance policies. The fact that they relied on institutional capital for these purchases no doubt played a role in the increasing oversight and policing of the industry as a whole. The industry continues to thrive, with over $500 billion in life insurance in effect in 2003, with about $100 billion of it in the hands of seniors eligible for life settlements, according to a Conning and Co. Research study.

In fact, the study predicted, in 2007, that growth of in excess of $1 billion in face value per year for the foreseeable future.

From very humble beginnings with Holmes’ ruling in 1911, this market has exploded with opportunities for all concerned, the insured, the life settlement companies, and the investors purchasing their policies.

Have you purchased Life Settlements (Viaticals) from Life Partners Holdings?

If you have purchased Life Settlements from Life Partners, you may be able to join a legal action to receive compensation for your losses. Complete the form on this page, or call 1-800-934-2921 to find out if you have a case.