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Article: Investing in Stranger's Life Insurance Carries Big Risks.(viatical transaction warning, electric utilities deregulation)(Brief Article)
- Article from:
- Los Angeles Business Journal
- Article date:
- September 25, 2000
- Author:
CopyrightCOPYRIGHT 2000 CBJ, L.P. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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You may have been approached to buy a "viatical" -- supposedly a safe investment with a high return.
"Profits guaranteed!" "Your principal safe," the Web sites scream.
But viaticals are a dangerous business today. Cheating is rife. Your potential returns are often stated deceptively. Several states have indicted viatical salespeople for fraud.
It's hard for amateurs to tell the plausible investments from the stinkers -- which makes it risky for amateurs to go anywhere near them.
With a viatical transaction, you invest in a stranger's life insurance policy. That stranger sells his or her policy, for cash. You buy it, or a fraction of ...