by Karen E. Culp
Bill Nelson and Viaticus, the company he represents, might want to buy your life insurance policy.
Viaticus is a wholly owned subsidiary of CNA insurance company. It focuses on purchasing life insurance policies from individuals who no longer need or want them, and who qualify for the purchase program.
The program is not like those used for terminally ill patients, which "have gotten a bad name around town," in some cases, Nelson said. A portion of Viaticus' business is in this type of settlements, but its emphasis is on its High Net Worth Service.
High Net Worth purchases life insurance policies from individuals who are 70 and above and in good health. The company does not require any medical tests, but does check the policyholder's health records.
The policyholder will transfer his or her interest in the policy to Viaticus, which will then assume the premium payments on the policy and receive the benefit when the individual dies. What Viaticus pays to the individual for a policy depends on a number of factors, Nelson said.
"We take into account the type of policy, the premium, how long it has been in effect, and the age and health of the policyholder," Nelson said.
Viaticus then determines what it will pay to the policyholder and makes an offer.
Some individuals who approach Viaticus looking to sell a policy may not qualify for the program, and in that case no offer will be made.
Nelson has been a producer for Viaticus, a Chicago-based company, for only a few months. He is an attorney, and has spent a great deal of his career in the insurance and trust businesses.
Though he has not yet secured a client for the High Net Worth program in the Springfield area, he has talked to between 50 and 70 people about the program, and he has encountered some good prospects, he said.
"I've been going to accountants and attorneys and presenting the program to them, asking if they have clients who may qualify. Most of the people I've talked to say this looks like a good thing, but that it is not the type of thing that happens very often," Nelson said.
Nelson said there are no laws that regulate this type of transaction. Life insurance policies become a portion of a person's estate, or an asset, and when the person sells that policy, he or she is simply transferring the interest in the policy to Viaticus.
Nelson is the only producer for Viaticus in Springfield right now. Viaticus is also the largest company in the country that is making these types of settlements. There are some other companies who are getting into the business of buying life insurance policies, but many of them are too small to achieve what they want to yet, Nelson said.
"A lot of these companies are start-ups that really don't have the financial backing behind them that Viaticus has. Viaticus has the advantage of having CNA behind it and being able to leverage these deals, but many of the smaller companies don't have that type of financial backing," Nelson said.
Nelson said he is seeing the most activity in life-insurance policy selling among companies, small businesses and partnerships.
"This is ideal for those type of people who've maybe bought a policy on a key person who then leaves, or they've bought a policy they can no longer afford to pay the premium on," Nelson said.
Other people approach Viaticus because their situation in life changes; they don't need to retain a policy to provide for estate taxes, for example, or their family's overall financial situation has changed.
Viaticus has been around for about five years, and it has been focusing on this portion of the business for about the past two, Nelson said. A portion of Viaticus' business continues to be purchasing policies from terminally ill people, but the High Net Worth program has become its primary focus.
Nelson said the program offers people an alternative to simply cashing in a life insurance policy and gives them cash in hand for that policy.
The High Net Worth program now represents 60 percent to 70 percent of Viaticus' business.
Nelson said he thinks there is a great need for this type of service in the Springfield area.
"Everyone I've talked to has said they think it's a great program. It's not for everyone, but for those people who have an insurance policy they no longer need or want, it's a very good option," Nelson said.
A number of offers to sell to Viaticus are refused simply because the seller is too young. Viaticus primarily strikes deals with people over 70, Nelson said. Another reason for refusal is that the policy has been in place for less than two years, he added.
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