WHAT IS A LIFE SETTLEMENT?
It is a legal trade of an insured’s existing life insurance policy to a third-party buyer. Through this contract, a policyholder, in exchange for valuable consideration, is willing to transfer ownership over the policy’s death benefit to a purchaser. The new policy owner is responsible for future premium payments until the policy matures, at which point, the death benefit is paid to the contract owner.
WHAT IS A MORTALITY-LINKED CONTRACT?
A MORTALITY – LINKED CONTRACT is an interest in the death benefit of life insurance policy insuring the life of an individual.
HOW IS AN INSURED'S LIFE EXPECTANCY DETERMINED?
Life Expectancy (“LE”) is a statistical & actuarial measure of the estimated time an individual is expected to live. Professional third-party medical underwriters review and analyze an insured’s most recent and historical medical records and evaluate mortality risk based on characteristics such as age, health condition, gender, socio-economic factors, and lifestyle habits, etc. Based on the analyzed data points, the underwriter estimates an insured LE.
IS IT LEGAL TO BUY OR SELL A LIFE INSURANCE POLICY?
Yes. The legal foundation for life settlement was established after the 1911 Grigsby VS Russell U.S Supreme Court case. In the face of Justice Oliver Holmes, the US Supreme Court ruled, that a life insurance policy is to be considered as a personal property.
As of 2018, 44 U.S states including Puerto Rico have comprehensive guidelines and regulations in place to protect the rights of policy sellers and investors.
WHAT TYPE OF LIFE INSURANCE ARE ACCEPTABLE FOR LIFE SETTLEMENTS?
In general, all types of life insurance policies are acceptable (ex. Universal Life, Term, Variable, Whole Life)
WHAT HAPPENS AFTER A POLICY MATURES?
Upon maturity of each policy, a claim is filed with the insurance carrier. The proceeds of the collected death benefit are paid out to investors on a pro-rata basis.
WHAT IS A MINIMUM INVESTMENT AMOUNT?
Our offer mandates a minimum investment amount of $25,000 per unit.
CAN I USE MY IRA FUNDS OR RETIREMENT PLAN TO INVEST IN MLC's?
In general, investors can use their IRA, SEP IRA, Retirement Plans to invest in our offering subject to certain limitations.
WHAT IS THE DIFFERENCE BETWEEN LIFE SETTLEMENT AND VIATICAL LIFE SETTLEMENT?
In general, a life settlement contract insured is above the age of 65, with some minor health impairments and a life expectancy much over 24 months.
In viatical settlements, insured has a very short life expectancy of less than 24 months due to major health condition.
WHO CAN INVEST IN OUR OFFERING?
Accredited Investors are qualified to participate in Mortality-Linked Contracts.
To be an accredited investor, an investor must fall within ANY of the following categories at the time of the sale of a Unit(s) to that investor:
(1) A natural person whose individual net worth, or joint net worth with that person’s spouse or spousal equivalent, at the time of such person’s purchase of our securities, exceeds $1,000,000, excluding value of primary residence; or a natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse or spousal equivalent in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;
(2) A trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered hereby, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D;
(3) Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, partnership, or limited liability company, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
(4) Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any investment adviser registered pursuant to section 203 of the Investment Advisers Act of 1940 or registered pursuant to the laws of a state; any investment adviser relying on the exemption from registering with the Commission under section 203(l) or (m) of the Investment Advisers Act of 1940; any insurance company as defined in section 2(a)(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any Rural Business Investment Company as defined in section 384A of the Consolidated Farm and Rural Development Act; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;
(5) A private business development company as defined in Section 202(22) of the Investment Advisers Act of 1940;
(6) An executive officer or other person otherwise deemed an insider of the Company;
(7) An entity in which all of the equity owners are accredited investors (as defined above);
(8) Any entity of a type not listed in paragraph (a)(1), (2), (3), (7), or (8) of the definition of “accredited investor” set forth in Rule 501of Regulation D;
(9) Any natural person holding in good standing one or more professional certifications or designations or credentials from an accredited educational institution that the SEC has designated as qualifying an individual for accredited investor status. As of December 8, 2020, the SEC has designated Series 7, 65 or 82 securities license holders;
(10) Any natural person who is a “knowledgeable employee,” as defined in rule 3c-5(a)(4) under the Investment Company Act (17 CFR 270.3c-5(a)(4)), of the issuer of the securities being offered or sold where the issuer would be an investment company, as defined in section 3 of such act, but for the exclusion provided by either Section 3(c)(1) or Section 3(c)(7) of such act;
(11) Any “family office,” as defined in rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940 (17 CFR 275.202(a)(11)(G)-1): (a) with assets under management in excess of $5,000,000, (b) That is not formed for the specific purpose of acquiring the securities offered, and (c) whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment; and
(12) Any “family client,” as defined in rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940 (17 CFR 275.202(a)(11)(G)-1)), of a family office meeting the requirements in paragraph (a)(12) of this section and whose prospective investment in the issuer is directed by such family office pursuant to paragraph (a)(12)(iii).
The term “net worth” means the excess of total assets over total liabilities, excluding value of primary residence. In determining income, an investor should add to the investor’s adjusted gross income any amounts attributable to tax exempt income received, losses claimed as a limited partner in any limited partnership, deductions claimed for depletion, contributions to an IRA or KEOGH retirement plan, alimony payments, and any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income.
In order to meet the conditions for exemption from the registration requirements under the securities laws of certain jurisdictions, investors who are residents of such jurisdictions may be required to meet additional suitability requirements.
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