When medical advances improved the lives of people with incurable or chronic diseases, the housing industry emerged. [3] [5] Comment: This is one of the most common analyses currently presented by viatic resolution companies, and it should be noted that they are often unaware of the cost of such planning (the use of $300,000 in annual exemptions), as well as the fact that there are other more advantageous alternatives: Example: A 75-year-old customer has $510,000 in assets and a $200,000 life insurance policy. According to an analysis by the Vietnamese company, it should now carry out the policy and reduce its gross assets to $650,000. As a result, their heirs are not required to file a federal estate tax return and receive the entire estate without inheritance tax. A viatic company is a licensed organization that can purchase a life insurance policy directly from the insured and receive the face value of the plan. Comment: Sometimes it is appropriate to do nothing. If the client receives a 70% payment from the viatic company, their estate would be reduced to $650,000 with the viatic settlement arrangement, no tax return would be filed, and the net for their heirs would be $650,000. However, if the client did nothing, their gross assets would be $710,000, and while their children would have to file a tax return and pay about $22,000 in taxes, the net amount they would receive would increase by about $35,000. This is a case where deciphering the numbers could show a discrepancy between what seems like a good idea and what makes sense from an overall planning perspective. While loans can provide a large amount of funds, just like a viatic settlement, interest accumulates that must be repaid in addition to other expenses, and only increases monthly expenses if the person works to repay the loan. Comment: A business insurance policy that is no longer needed is often a great candidate for viatic billing.
These policies were usually purchased for a specific need and for a limited number of years. However, before selling the contract, the company may want to offer the outgoing manager coverage either for the sale or in the form of a retirement bonus. If JR`s health has deteriorated since purchasing the policy, he may want to convert the contract into permanent insurance for his own personal insurance needs. For example, an investor invests $70,000 to live on a $100,000 policy for the life of an insured at 12 months. This is a return of 43%. What Viatical cannot, however, guarantee is the insured`s actual life expectancy. If the Viator lives at five instead of one, the annual return of the policy is significantly reduced. If the investor has to add additional funds to make unexpected future premium payments, this also reduces the effective return. If the insurance company files for bankruptcy or, as is very likely in the last few months, is acquired by another insurance company, the policy factors (credited interest rate, mortality costs, expenses) can be adjusted by the new company, resulting in unexpected cash flow that the investor needs.
The Vietnamese company that sells these contracts cannot control several factors in this process and their « guarantees » make no sense. Get a free quote first. Then, talk to one of our consultants about your questions or concerns and decide if you would like to complete our simple 3-step settlement process. 5) Sale to an heir or relative. If the accelerated death benefit is not available, the policyholder should consider selling the policy to a child or heir. For example, if the viatic settlement company expects a 25% return on investment, why not pass that profit on to heirs rather than foreigners? Example: A reasonably healthy 75-year-old policyholder has $500,000 in life insurance with an annual premium of $10,000 that they can no longer afford. If she were to give up the policy, she would receive the cash value of $55,000, and if she stopped paying the premium, the policy expired. A Vietnamese company offered him $100,000 in cash. With so much conflicting information, the viatic colonization industry seems to be more of a landmine than a gold mine, and as more and more of our clients learn this design technique, we, as consultants, need to be better equipped to answer their questions.
It takes time and patience to discover legitimate businesses and reap the real benefits to the customer from all the convincing sales hype. Vietnamese colonies became increasingly popular in the United States in the late 1980s, when the AIDS epidemic reached its peak. [3] [6] The first victims of AIDS in the United States…