Example: "50% guaranteed return"
This refers to the lump sum that you'll receive when the insured eventually
dies, assuming nothing goes wrong. But it doesn't tell you the annual return
which depends on the accurate estimate of the insured's life expectancy and
the timing of his/her demise. An "annual return" can never be guaranteed.
Misleading Rates of Return:
Viatical issuers also advertise to potential investors rates of
return that are based on the full term of the investment, which is based on a
supposition about the insured’s life expectancy. If the insured lives
longer than expected, the investor’s return is diminished accordingly.
This significant caveat is not disclosed in advertisements.
