Question 1

What is the minimum investment into EquiLife Life Settlements?

Answer

$10,000 for a Cash/Non-qualified Investment, $25,000 for a IRA/Qualified Investment

Question 2

What costs are associated with EquiLife Life Settlements?

Answer

If you invest with cash, the only cost occurs if there is a premium call and the premium reserve account is depleted. At EquiLife, we try keeping investor costs to a minimum; that is why we have gone beyond other companies by structuring a pooled premium reserve account to reduce the chance you ever pay out of pocket. If you invest with a retirement account, EquiLife will pay any fees associated with your account and this investment for two years per $25,000 invested. This is not the case when investing with other companies, and will increase your return when you invest with us.

Question 3

Why do you use a Trustee?

Answer

First Western is an independent trust company that oversees our life settlement portfolios. This is the safest way to protect investors’ funds. The trustee is a national bank and holds the policies and funds in a statutory trust. This ensures that in the unlikely event EquiLife ever filed bankruptcy, creditors wouldn’t be able to access investor funds in the portfolio accounts.

Question 4

Which IRA Provider Do You Use?

Answer

When you invest with your retirement funds EquiLife will help you set up a "self directed IRA”. We prefer to use IRA Club. They have low rates, excellent customer service, and are based in Chicago, Illinois. If you already have a self directed IRA with another provider we can work with them instead. If you have a retirement account with a traditional institution, we can assist with the transfer of funds to your new self directed IRA. We pay all costs associated with the transfer or account set up. Your transfer will be tax deferred, meaning you will not pay any taxes for moving your money into the new account.

Question 5

What are the risks?

Answer

As with any investment there are risks associated with investing in life settlements. However, EquiLife has taken steps to reduce those risks. The main risk facing the investor is longevity; that is, the life expectancy of an insured of an owned life settlement. The industry standard is to order life expectancy reports from medical experts to determine the insured’s life expectancy. While those reports are usually accurate, there are no guarantees that the policy will mature "on time." When a policy goes beyond life expectancy the premium reserve may become depleted. This means premium calls can occur which will reduce your return on the investment. In the most extreme theoretical case, an insured could live so far beyond life expectancy that an investor could lose principal.

Question 6

How is the life expectancy determined?*

Answer

Before a life settlement company purchases a policy it hires a life expectancy company to determine how long the insured is expected to live. Life expectancy companies are comprised of doctors who typically review more than 200 pages of documents to determine the insured’s anticipated life expectancy. These documents include medical records, family history, past life insurance applications, and actuarial tables. These reports are available to you upon request.

Question 7

Is this legal?

Answer

Yes. For over a hundred years people have been selling their life insurance policies for a cash settlement. In 1911 the Supreme Court ruled in Grigsby v. Russell that selling and buying a “life settlement” is a legal transaction, no different than selling or buying any other asset.

Question 8

Are life settlements viaticals?

Answer

Though life settlements and viaticals may seem similar, there are some distinct differences. Life settlements deal with senior citizens who sell off their policies. Their life expectancies are usually between 3-10 years, and the insured mainly suffers from some type of chronic illness. With viaticals, the insured selling his or her policy is facing a life threatening illness and has less than a 2 year life expectancy. Most insureds are younger - 30-60 years old. With the progress of modern medicine, some of these people are cured of their illness and the cases can go on for decades. EquiLife belives viaticals have too much risk due to the insureds' age. With life settlements, the insureds' age plays a major role in ensuring that the policy does not go on for an extended period of time.

Frequently Asked Questions