A viatical provider is a person who effectuates a viatical settlement contract. In most cases they are the companies that represent the institutional funding groups. They manage the life insurance policy after it is sold, and also negotiate the offers.

In 1996, there was a tremendous boom in the viatical industry. This was due to many new companies that were entering the market to make hay while the sun shone. Some of them openly disregarded state laws, insurance laws, and rules and regulations of registration. Rather than risking their own money on the life expectancies of the individual insured, these firms passed this risk to the individual investors and charged a sizable fee for their services. Viatical brokerages appeared on the scene to meet the demands of these new investors. They acted as middlemen between buyers and viators. In addition to buying policies from the terminally ill, these providers are helped those with relatively minor illnesses, and in some cases, completely healthy insured people (over a certain age) who owned larger insurance policies.

With this ever-growing boom, one must exercise caution and discretion when selecting a viatical provider. Often, policyholders do not contact providers directly because they do not know about all of these companies and they do not have experience in negotiating with companies.

In order to do business in many states, the viatical provider must be licensed. If your state law requires licensing, then contact your local department of insurance for the latest list of licensed viatical companies. If your state law requires no licensing, it is still advisable to do business with a company that has been licensed in another state. It always pays to be safe in the long run.

Many times, viators (sellers) are so desperate for cash that they act quickly, without information or guidance. Often they have very little knowledge, limited to what has been told to them by the viatical providers. If you have a bad experience with a viatical settlement broker or provider, you can contact your states department of insurance to file a complaint.