The History of Viatical Settlements
Viatical settlement agreements first came about in 1911 following the Supreme Court case Grigsby v. Russell. In this case, Dr. Grigsby attempted to cash in a life insurance policy one of his patients sold to him following their death. The executor of the patient’s estate challenged this notion, fighting the case in court until it reached the highest level. Ultimately, Dr. Grigsby won the case and was able to procure the patient’s death benefits, making it the first case of a viatical insurance settlement.
This case set the precedent of one’s life insurance policy being considered personal property. The court ruled that anyone can trade or sell their life insurance policy to another benefactor, just as they can sell a house, car or stocks. The buyer then takes on payment of the insurance premiums and the overall benefit amount following the original owner’s death. Grigsby v. Russell also paved the way for senior life settlements.
The early precedent aside, viatical settlements didn’t become popular until the 1980s with the rise of the AIDS epidemic. At the time, AIDS was fast and deadly. Many of those diagnosed were young, single people who didn’t have beneficiaries in need. These settlements allowed them to make the most of their policies while they were still alive.
With many of today’s medical advancements, viatical settlements are not as well-known or understood. That’s why it’s vital to use a viatical settlement company like Settlement Benefits Association to evaluate your policy.