Posted : 01/19/2007
A national viatical settlement database is being created that will help track suspicious or fraudulent behavior in viatical-related transactions. But will it really help to prevent fraud? Or will it compromise your privacy and impede on your personal-financial life choices?
The Life Settlement Institute (LSI) is a nonprofit association made up of six, privately held viatical settlement companies. Its claim is that the database will help to prevent fraud by following-up on policy-sellers or buyers who are believed to be engaging in fraudulent activities, as well as professionals and brokers whose conduct is questionable. Critics, however, are leery to accept this all as fact, and believe that it will be possible for the information that is contained in the Viatical Settlement Database to be used for other purposes.
An infringement on privacy is a major concern, as well as personal information being sold to other companies and being used to attempt to sell other insurance policies and loans.
What is a viatical settlement
A viatical settlement, also known as a life settlement, is when a life insurance policy is sold to a third party for a percentage of the death benefit. The third party then becomes the beneficiary or new owner of the policy. Once the insured person dies, the beneficiary will collect the entire death benefit. The buyer must, however, pay all the future premiums until the insured dies.
Viatical settlement database opponents
In order to facilitate treatment, the Federal Health Insurance Portability and Accountability Act (HIPAA), requires a patient's consent to release medical records to "key players" (a requirement that the Bush Administration is currently trying to do away with). The main concern of skeptics to the database is that the term "key players" will change in meaning. It will go from just being your doctor and health plan provider, to including more groups, such as your insurer, bank, pharmacy, employer, medical data warehouses, and so on. If a company signs up for access to the Viatical Settlement Database, they may be able to divulge information about your medical history and past claims, in turn charging you higher premiums on your life insurance policy or denying you products.
If you are interested in receiving a life insurance quote, log on to Insurance.com. Here you will be able to evaluate multiple rates from best-in-class life insurance providers - helping you find you the best life insurance coverage for you and your budget.
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