Frequently Asked Questions

What is a Viatical and/or Life Settlement?

A Viatical and/or Life Settlement is the sale to a third party of an existing life insurance policy for more than its cash surrender value but less than its net death benefit. The industry generally uses the term “Viatical Settlement” to refer to a transaction involving a terminally or chronically ill insured and a “Life Settlement” to refer to a transaction involving an insured who is not terminally or chronically ill, and generally over the age of sixty-five (65). However, these terms are not consistently used in this manner. For example, some states in the USA use the term “Viatical Settlements” to refer to the sale of all life insurance policies, regardless of whether or not the insured is terminally or chronically ill. At least one state in the USA uses the term “Life Settlements” to refer to all transactions, including those in which the insured is terminally or chronically ill.

How can you give a higher return than other "investment funds" offering Life Settlements?

By buying directly from easy Life Settlements you are cutting out the fund "managers", and so there are no additional costs of brochures, marketing, administration and regulation. Also, by buying part - or all - of a policy from eLS, in the event of the early demise of the Life Assured, you will receive your payment immediately, providing you with a much larger overall return. In a fund, the policies are owned by the fund and in the event of an early demise of a policy holder, the sum assured is paid into the fund, and not distributed directly to you.

Is there any advantage to me of lodging my money with your company before you have a suitable policy for me or before I decide on which policy to purchase or part-purchase?

Finding suitable policies for our portfolio is challenging, and it means that money must be instantly available for purchase. If a suitable policy is offered to us, unless we have available cash immediately, the opportunity to purchase may be taken up by someone else. In order to ensure we have every chance of purchasing suitable policies, we have set up a facility - known as our early purchase option - for interested third parties to place money on deposit in our escrow account. As an incentive to do this, (1) they will receive the appropriate deposit interest (2) they will have first refusal on any new policies offered for sale in the portfolio and (3) they will receive an extra 0.5% per annum return on capital on any policies purchased or part purchased through us up to the limit of the sum deposited. There is no requirement to purchase, and funds can be removed from the escrow account at any time subject to a small handling fee.

Who regulates Viatical and/or Life Settlements?

In the USA, Viatical/Life Settlements are regulated by state Insurance Departments. Some states have enacted statutes addressing the sale of life insurance policies insuring non-terminally or chronically ill individuals and some only have laws that regulate the sale of life insurance policies insuring terminally or chronically ill individuals. Other states do not regulate the transactions at all. Of those states that regulate the transaction, most require both the Viatical/Life Settlement Broker (facilitator of the transaction) and Viatical/Life Settlement Provider (purchaser of the policy) to be licensed. Please click here for detailed state by state information.

Outside the USA, there appears to be no regulation applying.

Is this ethical? Are you taking advantage of people who sell their policies?

There are many reasons why a policyholder would want to either stop paying premiums early - which often means losing the policy benefits - or to release some of the money tied up in the policy before it "matures". As explained before, insurance companies are not at all generous in those circumstances, and the life settlement industry provides a genuine and valuable service by providing higher payouts to the policy owners than they could otherwise obtain from the insurers.

What are some of the reasons why people might consider the sale of their policies?

• The policy is no longer needed or wanted
• To pay for healthcare costs
• Premium payments have become unaffordable
• As an alternative to a lapse or surrender of the policy
• Change in estate planning needs

How much money will an insured person receive by selling a life insurance policy?

The value of a life insurance policy is determined by a number of factors, including, but not limited to, the age and medical condition of the insured, the type of insurance policy, the rating of the issuing insurance company and amount of premium payments to keep the life insurance policy in force.

What types of life insurance policies can be sold?

Most types of life insurance policies can qualify, however, the most common are Universal Life, Whole Life, and convertible Term Life. It is also vital that the rights to the policy proceeds are assignable.

After the insured sells the policy, are there any restrictions on how the money can be used?

No, there are no restrictions on the use of the funds, which provides a valuable service to the policy owner - see "reasons for sale" above.

Are the proceeds of a Viatical/Life Settlement taxable to the vendor (the insured)?

In the USA, the proceeds are tax-free up to the amount paid in premiums during the life of the policy. Whether or not the balance of the proceeds will be taxed depends on the specific circumstances of the insured.

What happens to the policy after it is sold?

All rights and obligations of the policy are transferred to the new owner - for example easy Life Settlements LLC - who then lodge their interest with the insurance company and assume responsibility for making premium payments on the policy. easy Life Settlements may then name new beneficiaries of the policy who will collect the proceeds upon the death of the insured.

What is the tax position with regard to any gain made by purchasers of part or all of a life settlement?

As a company trading in a portfolio of Life Settlements, easy Life Settlements will pay tax at the normal corporate rate applying. For individual purchasers of part of a life settlement portfolio, any tax that may be payable will depend upon the residence and domicility of the individual, together with their individual financial circumstances. Purchasers should take professional advice, but our view is that should any gain be taxable, the tax will be a capital tax rather than an income tax.