'I've never felt like anybody wanted me dead before,'' says Kendall Morrison, a 35-year-old New Yorker with AIDS. But an unnamed Michigan investor who purchased Morrison's life-insurance policies in 1993 surely did. Earlier this year, the investor threatened to sue the broker who sold him the policies for fraud and breach of contract. He was upset that, five years later, Morrison was still alive.

Breach-of-contract lawsuits are the latest wrinkle in the viatical settlements industry, the controversial business in which terminal patients' life-insurance policies are sold as commodities. Since the financial return of the investor, who lays out cash and takes over the premium payments, is inversely related to the seller's longevity, the practice is fairly ghoulish. On the other hand, the deals get money to people who desperately need it.

Morrison, for instance, sold his two policies for around 50 percent of their $350,000 face value at a time when he'd lost his health insurance and was ''extremely sick -- wasting, unable to retain food, in diapers.'' But after multiple hospitalizations, he went on a pricey regimen that included protease inhibitors and slowly returned to stable health. The investor grew impatient. ''They kept sending me these Fed Exes and calling,'' Morrison says. ''It was like, 'Are you still alive?'''

Morrison's broker settled in May, presumably not wanting to risk a court battle. Other cases are pending. Investors in Dignity Partners, a San Francisco-based company, charged the company's board with being remiss in not seeing how new therapies would affect their returns.