Easing One's Last Years...for a Price

End-of-life decisions, including such mundane ones as how to pay funeral and burial expenses, are difficult and can be emotional.

Suppose you have AIDS or another terminal illness and don't have much money to pay doctor and hospital bills. Or you're unemployed and can't afford health insurance. How can you live out your last days with dignity?

Some people agree to an unusual kind of insurance settlement, developed only 20 years ago or so. It's called a viatical. The name comes from the Roman viaticum, referring to the Christian practice of administering a holy supper to a person in danger of death.

Life insurance is, in many ways, really death insurance. But a form of it, called viatical agreements, pay the living.

Only in this case, the dying person gets not bread and wine but a large amount of money from a viatical company on which to live and pay bills - including funeral expenses.

The money comes from the person's own life-insurance policy - paid out before, not after, death.  

Say a woman has a traditional policy worth $100,000. A viatical company will pay her a portion of that amount now - say $65,000 - in return for being named her beneficiary. When she dies, most likely within a year or two, the viatical company makes a handsome $35,000 profit.

Without money to pay for medical care, life's endpoint can be miserable and lonely. Some people are willing dip into their insurance to avoid this.

Some critics find the practice a bit morbid. Viatical companies have been banned in some states for aggressively fighting with each other to pry life-insurance policies away from the sick or depressed, and for re-selling the policies to others as investments.

But some elderly patients, including those with no living relatives to leave the proceeds of an insurance policy, see nothing wrong with using insurance money in life rather than death, in order to depart the world in a dignified way.  

Of course, if they outlive expectations and spend all the viatical money, there'll be no life insurance left for them or anyone else.