What Are Life Settlement and Viatical Investments?

Exemplify Financial Services, LLC manages a group of Funds which acquire interests in life insurance policy investments via life settlements and viaticals. A “life settlement” or “viatical” is the transfer of the beneficial interest in a life insurance policy, by the insured person through a provider to a third party (in this case, the Fund). The policy owner transfers their policy at a discount to its face value, in return for an immediate cash settlement. The purchaser of the policy is then responsible for premiums payable on the policy and will be entitled to receive the full-face value from the insurance company upon maturity (the passing of the insured).

Life settlements and viaticals can play an important part in maximizing your retirement portfolio for:

  • Financial Prosperity

  • A Comfortable Retirement

  • Estate

  • Philanthropy

Why Do People Sell Their Life Insurance Policies?

The insured may have outlived the beneficiaries the policy was originally intended to protect.

Premiums may have become unaffordable and unless sold as a life settlement, the insured may have to let the policy lapse.

The insured may be financially secure and have no further need for the policy.

The insured may wish to make a gift of the monetary value of the policy while they are still alive.

The insured may sell the policy for estate planning purposes.

The insured is considering whether or not to lapse or surrender the policy, for its cash surrender value.

In circumstances where the alternative for the insured is to let the policy lapse and lose a potentially large portion of the premiums which have been paid on the policy, a life settlement is an attractive option.

What is an Expected Rate of Return on a Life Settlement or Viatical?

Life settlements and viaticals as an asset class have provided exceptional returns when held to maturity. Clients’ portfolios invested in Funds with Exemplify Financial Services, LLC can expect estimated returns on their investment that correspond to the insureds life expectancy (LE). (i.e. 24 month LE = 24% return on investment, 18 month LE = 18%) Exemplify Financial Services, LLC has no management fees for clients on their IRAs and 401K rollovers.

Exemplify Holds Funds in a Third-Party Bank Escrow

Life settlement and viatical investments are fractional investments in a trust that holds the legal ownership of the policy and death benefit payout. Exemplify further protects its clients by having investor funds held in trust by an independent bank escrow account. Exemplify holds clients’ funds at Nevada Trust Company. These funds are always kept in an escrow account. Nevada Trust, as trustee, pays policy premiums through the end of the premium escrow period, and then collects and distributes the death benefit claim from the insurance carrier upon the formal passing of the insured. The death benefit is distributed by the escrow agent and trustee to the owners of the trust interests on a percentage of ownership basis.

Who Are Exemplify’s Clients?

Exemplify only accepts clients who are Texas residents, whom wish to invest a minimum of $50,000 in the life settlement and viatical market. Most clients invest either cash or funds rolled over from a traditional IRA, Roth IRA, SEP IRA, self-directed IRA, or a 401K retirement plan. Exemplify’s clients include accredited investors, as well as trusts and foundations.

The Purchase Process

From the initial meeting, should the client choose to move forward, the client receives a ‘welcome aboard’ letter and offering documents, which include:

  • Limited Offering Memorandum of the Fund;
  • Client/Purchaser Suitability Questionnaire;
  • Life Settlement/Viatical Purchase Agreement, which outlines the terms of purchase;
  • Subscription Agreement, which describes the policy/asset for purchase; and
  • Escrow Agreement of the Bank as Trustee

Upon a purchase, the client then receives Exemplify’s welcoming documents, including the confirmation of purchase and specific documentation, and a complete closing package of the details of one or more policy interests purchased and the certificate of purchase issued by the escrow/trustee bank.

Trust Account Maintenance

Once the policy has been purchased, the third-party bank trustee automatically pays the monthly premiums on the policy, and maintains the policy. Exemplify utilizes a special third-party service to monitor the insured’s life and health. Exemplify receives quarterly updates on the policies serviced by the Fund, as well as the health and status of the insured’s life. The insurance carrier provides an annual ‘verification of coverage’ of the policy.

Upon the passing of the insured covered by the policy, the trustee bank will file a claim with the life insurance carrier, and the insurance company will pay the claim to the trustee bank holding the trust. The trustee bank then distributes the funds pro rata to the Exemplify clients according to the fractional share of each in the trust.

Once an investor receives their funds from the trust, an investor has an option to reinvest in a new life settlement or Viatical policy.

Want to Know More?

Email or call Exemplify Financial Services, LLC today to schedule your free consultation, and maximize your retirement returns today.