• Once you accept a settlement offer an escrow account will be set up to hold your policy and the purchaser’s money until the documents that change ownership of the policy and the beneficiary have been received and processed by the insurance company.
• Within three business days after the life settlement company gets written proof that the changes in policy ownership and beneficiary have been processed by the insurance company, the settlement proceeds will be sent to you.
• You can change your mind about the life settlement within 30 days from the date of the life settlement contract or 15 days after you are paid, whichever is earlier. If you cancel the settlement contract, you must return the cash settlement plus any premiums paid by the buyer, and repay any loan and loan interest paid on account of the life settlement. If you die within the period, the life settlement contract is cancelled and the named beneficiaries will receive the death benefit, but any cash settlement funds received plus any premiums paid by the buyer, and any loan and loan interest paid on account of the life settlement must be returned to the buyer within 60 days of the date of death.
• Your contract may require you to allow future owners of your policy to regularly contact you to check your health status.
Consumer tips.
• Comparison shop. Get quotes from several settlement companies and be sure you have the best offer.
• You do not have to accept any life settlement offer. You should decide what is in your best interests.
• Check all application forms for accuracy, especially your personal information and medical history.
• Be cautious of any offer to loan you money to buy life insurance. Ask what strings are tied to the loan, and what will happen if the loan is not repaid.
• Stranger-originated life insurance is prohibited. Contact the Office of the Commissioner of Insurance if you are offered any money or a gift to purchase life insurance, or if you are offered “free” life insurance for a period of time, or if you are asked to purchase life insurance for the purpose of selling it to investors.
Questions or complaints? Contact your insurance company or agent:
(Insurer Name)
(Customer Service)
(Address)
(Toll free telephone number, if available)
(Telephone number)
Ins 2.18 Appendix III
WISCONSIN GUIDE TO PURCHASE OF A LIFE SETTLEMENT
Keep this important information
Thinking about buying a life settlement as an investment? Life settlements allow life insurance policyholders to sell their policies for an immediate cash benefit that is less than the face value of the policy. In return, the buyer of the life settlement becomes the new owner or beneficiary of the life insurance policy, is responsible for payment of future premiums, and collects the death benefit when the insured dies. Typically, interests in the settled life insurance policies take the form of securities and are sold to investors. Multiple investors may invest in a single policy, or the investors may own an interest in an underlying pool of settled policies. When the insured dies the investor who has purchased an interest in the settled policy is entitled to collect a portion of the death benefit in accordance with the terms of the purchase contract. From an investor’s perspective a life settlement is an investment in the timely death of the insured person. Before you put your money into this type of investment it is critical that you understand the risks involved, know how your investment will be used, and know what the likely return will be. You should consult with a professional financial advisor, review Wisconsin regulations relating to the purchase of a life settlement, and deal with a licensed life settlement provider and registered securities broker dealer.
Questions to ask before you purchase a life settlement:
• Is the principal and return on my investment guaranteed?
• How is the return on my investment determined?
• When will the principal and return on my investment be paid?
• What fees or other costs am I required to pay?
• Will I ever be required to pay the premiums on the insurance policy?
• Will I be an owner of the policy or only a beneficiary?
• What happens if the settlement company becomes insolvent or goes out of business?