A Texas viatical firm has reached a $250,000 settlement in a lawsuit brought against it by a Pennsylvania woman with AIDS who claimed the firm did not live up to its promise to pay her health insurance premiums.

The patient, identified in the suit as “M. Smith,” plans to use the entire settlement to arrange her own health insurance, according to the Philadelphia Inquirer, citing a source with the AIDS Law Project of Pennsylvania.

Smith was diagnosed with AIDS and cancer in 1992 and told she had about two years to live, according to the report. Two years later, Life Partners of Waco, Texas, purchased her $150,000 life insurance policy for $90,000 and signed a contract agreeing to pay her health and life insurance premiums for the rest of her life, the Inquirer reported.

Had Smith died within two years, the report indicates, Life Partners would have made a profit, but since Smith is now 53, the company has lost money on her contract.

Smith sued the firm in 2005, claiming they had twice threatened to stop paying for her health insurance and was represented in the case by the AIDS Law Project and Jacob C. Cohn, a lawyer with Cozen O’Connor, a Philadelphia firm.

“We knew all along that the defendants had no defensible position in refusing to comply with their own contract,” said Cohn in a statement. “With this settlement, our client will be able to ensure that she continues to receive needed life-sustaining medicines without the stress and uncertainty of not knowing whether or when LPI might stop paying her insurance premiums.”

In 2006, a Camden County, Pa., judge ordered Life Partners to place more than $800,000 in trust as security for payment of future premium payments, a decision the company appealed. The case was returned to the trial court for hearing on the amount of damages.