Page "Viatical settlement" Paragraph 6

A U. S. Supreme Court decision from 1911 provides the legal basis for viatical settlements.

In Grigsby v. Russell, 222 U. S. 149 ( 1911 ), Dr. A. H. Grigsby treated a patient named John C. Burchard.

Mr. Burchard, being in need of a particular surgical operation, offered to sell Dr. Grigsby his life insurance policy in return for $ 100 and for agreeing to pay the remaining premiums.

Dr. Grigsby agreed and as a result, the first viatical settlement transaction was created.

When Mr. Burchard died, Dr. Grigsby attempted to collect the benefits.

An executor of Burchard ’ s estate challenged Dr. Grigsby in Appeals Court and won.

The case eventually reached the U. S. Supreme Court where Justice Oliver Wendell Holmes Jr. delivered the opinion of the court.

He stated in relevant part that “ So far as reasonable safety permits, it is desirable to give to life policies the ordinary characteristics of property.

To deny the right to sell except to persons having such an interest is to diminish appreciably the value of the contract in the owner ’ s hands .”