The Origin of Viatical Settlements

The term viatical comes from the latin word viaticum, which is defined as provisions for a journey.  Viaticum were supplies and equipment that the oman soldiers were given to prepare for their voyages into battle, which usually turned out to be their final journey.  The word may now seem appropriate given that viatical settlements offer an alternative way to fund terminally ill individuals with the necessary money for medical expenses and comfortable living in their final days.

Viatical Settlements did not begin as an actual business until the mid-1980's, when the AIDS epidemic was beginning to explode.  The number of ill patients was increasing due to this new outbreak, and it was acknowledged that many of these patients lacked the money to pay for their medical bills, yet had life insurance policies worth large sums.  Because their life expectancies were inevitably short, they simply needed the money to pay for their cost of living and necessary medical treatments due to their illness.  This was when small firms began offering viatical settlements.  Patients were funded and investors were compensated.  The viatical industry's commencement was successful. 

By 1996, the industry was flooded with new companies and investors.  It had become difficult to distinguish which companies were legitimate and which were not.  Many of the companies beginning to sell viaticals were paying no attention to state security laws, insurance laws, or registration requirements.  They were also using money from investors, instead of jeopardizing their own funds.  Money ended up getting distributed incorrectly, and the business was getting out of hand.

In order to create stability and integrity within the industry, regulations became stricter and viatical brokerages began working to mediate between buyers and viators.