Settlement Group

The Settlement Group: Strategies for Life


Disclosures

Seek financial, insurance, tax and other advice where appropriate.
A life settlement agreement enables you (the “Life Settlor”) to sell your life insurance policy for cash at a discount from its face value.

  • There are alternatives to the process of selling your life insurance policy, which you may prefer. Some alternatives, where applicable, include (a) borrowing against the cash value of the life insurance policy, (b) surrendering the life insurance policy, and/or (c) receiving payment of accelerated death benefits that may be available under your policy. You may obtain information on these alternatives directly from the insurer that issued your life insurance policy.
  • Proceeds of the life settlement could be taxable under federal income tax and state franchise and income taxes. You should obtain advice on these matters from your legal, financial and tax advisors.
  • The proceeds received from the sale of your life insurance policy may be subject to claims by your creditors, personal representatives, trustees in bankruptcy and receivers in state and federal courts. You should obtain advice on these matters from your legal and financial advisors.
  • Receipt of the proceeds from the sale of your life insurance policy may adversely affect your eligibility for Medicaid, Supplemental Social Security Income or other governmental benefits or entitlements. You should obtain advice on these matters from appropriate agencies and from your legal and financial advisors.
  • Entering into a life settlement agreement may cause you to forfeit certain rights or benefits under your life insurance policy, including conversion rights and waiver of premium benefits that may exist under the policy. In addition, entering into a life settlement agreement for joint policies, policies involving joint riders or any policies covering the life or lives of other persons may result in the loss of these additional coverages. You should obtain advice on these matters from your legal and financial advisors, or from your insurance agent or the company that issued the policy.
  • The life settlement provider or its financing entity may assign or otherwise transfer its interests in your life insurance policy to another party without your consent or knowledge.
  • Funds for the payment of the purchase price of your life insurance policy will be disbursed to you by an escrow agent to complete the sale of your life insurance policy to the life settlement provider generally within two (2) business days after all the conditions to closing have occurred, including, without limitation, the life settlement provider’s receipt from the insurer of acknowledgement that ownership of the policy has been transferred and the beneficiary has been designated.
  • The name, business address, and telephone number of the independent escrow agent are set forth in the escrow agreement. You may contact the escrow agent to inspect or receive copies of the escrow agreement and related documents.
  • The life settlement provider or its financing entity will be the new policyholder or certificate holder of your life insurance policy pursuant to the life settlement agreement. This will result in all rights related to the policy, including, without limitation, the right to collect benefits under the policy being transferred to the life settlement provider or its financing entity. Neither you nor any of the current beneficiaries under the policy will have any further rights to receive any benefits under the policy.
  • All medical, financial or personal information solicited or obtained by a life settlement provider or life settlement broker about a life settlor or an insured, including the life settlor’s or insured’s identity or the identity of family members, a spouse or a significant other, may be disclosed as necessary to effect the life settlement between the life settlor and the life settlement provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to a life settlement purchaser, another life settlement provider or a financing entity that provides funds for the purchase of this policy. You may be asked to renew your permission to share information every year.
  • After transfer of the policy under the life settlement agreement, the insured, or his/her personal physician or other personal contacts designated by the insured may be contacted by the life settlement provider or its authorized representative on a periodic basis for the purpose of determining the insured’s health status. This contact is limited to once every three (3) months if the insured has a life expectancy of more than one (1) year, and no more than once each month if the insured has a life expectancy of one (1) year or less.
  • Your life settlement provider is not in any way affiliated with the insurance company that issued your life insurance policy.
  • You have the right to rescind this life settlement at any time up to and including the fifteenth (15th) day after you receive the purchase price agreed for your policy. If you do decide to rescind this agreement, you must repay the full purchase price as well as any policy premiums, loans, interest, or other payment that the life settlement provider has made to the insurance carrier to enhance the value of the policy or to keep it in-force.
  • When entering into a life settlement contract, having a recent physical exam is in the life settlor’s best interests since an accurate life expectancy can only be predicted based on current medical records.