Frequently Asked Questions About Veris Settlement Partners

“Our life settlement business has grown considerably since we started doing business with Veris. It’s truly been win-win for both our clients and our agency.”
– Bob Parmett, President, The Parmett Group

A Life Settlement is a sale of a life insurance policy where the insured is 65 years of age or older and does not have a terminal or chronic illness. In a life settlement transaction, the policy owner always receives more for the policy than the issuing insurance company will pay for the surrender of the policy.

Policies must have insureds that are at least 65 years of age and need to have a Face Amount of at least $100,000. Types of policies eligible include: universal life, term life (if convertible), whole life, variable life, and variable or universal survivorship/second to die.

No. The application and appraisal process with Veris Settlement Parners, Inc. is free and no medical exam is required. The insured will only have to consent to having their medical records reviewed.

The amount to be paid to the owner of the policy will depend upon a number of factors, including the medical condition of the insured, the amount of premium payments to keep the policy in force and the cash surrender value of the policy.

Culture of Compliance.  A broker who follows procedures that meet the highest standards – especially important now that the most populous states regulate life settlement.

Written Agreements between producers and providers, and between the life settlement broker and the seller, detailing all terms, conditions and compensation.

Comprehensive Documentation approved by the Department of Insurance in the policy owner’s state.

Extensive Disclosure dealing objectively with the pros and cons of life settlements such as tax impact, benefit eligibility and future insurability

Privacy Protection and a secure  environment for confidential information.

“Shopping around” often works against the policy owner and results in a lower value. When a provider receives a file from more than one broker it raises questions as to who controls the case. Some providers will just make the same offer to all comers or even decline all offers, afraid that the case won’t close. Either way, the ability to negotiate a higher “final” price for the policy is reduced for everyone.

First: An application is submitted to Veris Settlement Partners, Inc. We will obtain an in-force illustration of the policy from the issuing insurer showing the Face Amount and any outstanding loans and premium due.

Next: Veris obtains copies of the insured’s existing medical records from the insured’s physicians. No medical exam is necessary for the insured. We package this information and submit it to multiple life settlement providers to establish a competitive marketplace and obtain the highest possible offer.

An offer is made: If insured accepts the offer the life settlement transaction proceeds to closing. The settlement provider will deposit settlement amount with an escrow agent or trustee. The money will be sent within three business days of the date that insurance company confirms to the provider that the transfer of policy ownership has been completed.

Our goal is to complete most transactions in 90-120 days. The life settlement providers need to review medical records carefully and sometimes obtaining these records may take some time to accomplish and can slow down the transaction process.

Life settlement providers employ a number of techniques to determine the insured’s status. For example, most use the Social Security Administration’s public database, which “frees up” a social security number when someone dies. They will also periodically call a person designated by the insured to inquire as to the insured’s health status. Most states prohibit the providers from contacting the designated contact more that four times per year.

Most states have a rescission period after the insured receives the money from the provider. The guidelines for any rescission period will be explained in detail in the Life Settlement Purchase and Sale Agreement, which can vary on a state-to-state basis.

If the insured dies during any rescission period (which would be explained in detail in the Life Settlement Purchase and Sale Agreement), the settlement contract will automatically cancel. The provider will pay the owner of the policy or beneficiaries designated by the owner in the life settlement contract any proceeds it receives from the policy, minus any money it already paid for the purchase of the policy and any premiums it paid to the insurance company to keep the policy current. The insurance company or the provider should refund any unearned premiums paid.

The proceeds from a life settlement are generally tax free up to the amount of the premiums paid for the policy. The difference between that amount and the cash surrender value is generally taxed as ordinary income. Amounts received in excess of the cash surrender value are generally taxed as a capital gain. We strongly encourage sellers to consult their own tax and financial advisor before completing a transaction so that they can determine the tax impact from the sale.

Although both a broker and a provider are instrumental participants in the sale of your policy, there are important differences between them. A broker works for the policy owner. The broker’s job is to “shop” the owner’s policy to multiple providers and create a competitive environment that ensures that the owner receives the best offer possible. A provider works on behalf of the institutional investors that they represent. Their objective is to purchase your policy for the lowest price possible and maximize the return on investment for their investors.

Veris Settlement Partners, Inc. is a multi-state viatical and life settlement broker. Veris Settlement Partners, Inc., and/or its affiliate firms Chesapeake Financial Settlements, LLC and Select Life Settlements Corporation, and/or one of its two directors as individuals, may be licensed as a life settlement broker or viatical settlement broker, or may be able to broker a life insurance policy owned by a resident of most states. For a list of states and licensing call Veris. Some or all of the proceeds from a life settlement may be taxable under federal or state income tax laws. Advice from a professional tax advisor is recommended. Veris Settlement Partners, inc. is not a viatical or life settlement provider. This Compliance Notice is current as of August 15, 2008 and is subject to change.