Disclosures

Information You Should Know Before Entering Into a Life Settlement

 What is a Life Settlement?

A Life Settlement is the sale of a life insurance policy or certificate (“Policy”) issued on the life of a person, for an amount that is less than the Policy’s face value. The person covered under the Policy is the Insured. The Insured may or may not be the owner of the policy (the “Policy Owner”). Only the Policy Owner has the right to sell the Policy. If you are the Insured but not the Policy Owner, the Policy Owner cannot sell the Policy without your consent. The Policy is purchased from the Policy Owner by either a life settlement provider or an institutional buyer (collectively, “Provider”) when both parties have entered into a purchase agreement (the “Life Settlement Contract”). Additionally, there are persons called Life Settlement Brokers (Opulen Capital is a Life Settlement Broker) who may be involved with the sale of the Policy.

How do Life Settlements work?

Most Life Settlement Brokers or Providers will ask you to complete a policy evaluation form and medical release forms so they can gather information from the life insurance company and your doctors. Information gathered is confidential and is not provided to anyone without your written approval. If you qualify, the Provider will make you an offer for your Policy. The amount offered for your Policy will be based on facts such as how long you are expected to live, the amount you pay for premiums, the rating of your insurance company, and your Policy’s terms. If you accept the offer, you will sign a Life Settlement Contract.

Are there any possible alternatives to a Life Settlement?

There are possible alternatives to Life Settlement Contracts including, but not limited to, accelerated death benefits offered by the issuer of the life insurance policy.

What are the tax implications of a Life Settlement?

Some or all of the proceeds of a Life Settlement Contract may be taxable, and assistance should be sought from a professional tax advisor.

Can a Life Settlement affect any public assistance I may be receiving?

Receipt of the Life Settlement Contract proceeds may adversely affect the recipient’s eligibility for public assistance or other government benefits or entitlements, and advice should be obtained from the appropriate agencies.

Are the proceeds of a Life Settlement subject to the claims of creditors?

Proceeds of the Life Settlement Contract may be subject to the claims of creditors.

Is the Provider or Life Settlement Broker required to keep my information confidential?

All medical, financial, or personal information solicited or obtained by a Provider or Life Settlement Broker about an Insured, including the Insured’s identity or the identity of family members, a spouse or a significant other may be disclosed as necessary to effect the Life Settlement Contract between the Policy Owner and the Life Settlement Provider. If you are asked to provide this information, you will be asked to consent to the disclosure. The information may be provided to someone who buys the policy or provides funds for the purchase. You may be asked to renew your permission to share information every two years.

Who does the Life Settlement Broker represent and what is the Life Settlement Broker’s role?

The Life Settlement Broker represents exclusively the Policy Owner, and not the insurer or the Provider or any other person, and owes a fiduciary duty to the Policy Owner, including a duty to act according to the Policy Owner’s instructions and in the best interest of the Policy Owner.

Opulen Capital is the Life Settlement Broker you have chosen to represent you with the sale of your Policy and, as such, owes you a fiduciary duty to act in your best interest in the course of its representation. In its capacity, Opulen Capital will prepare and submit the Policy proposal to multiple Providers in an effort to secure the best available market price for the Policy.

Opulen Capital has no affiliations or contractual arrangements with any Providers or persons making an offer on the Policy leading to a Life Settlement Contract. At the time offers are received and before you enter into a Life Settlement Contract, Opulen Capital will present you with a Summary Pricing Report that will include, at a minimum, the following: (a) a full, complete, and accurate description of all offers, counter-offers, acceptances, and rejections relating to the proposed Life Settlement Contract, (b) a complete reconciliation of the gross offer by the Provider (the total amount of value offered by the Provider for the purchase of one or more Policies, inclusive of commissions and fees) to the net amount of proceeds to be received by the Policy Owner, (c) the method of calculating the compensation paid or to be paid to Opulen Capital and/or other persons acting for the Policy Owner in connection with the transaction, where the term compensation includes anything of value paid or given, and (d) the name of each broker who receives compensation and the amount of compensation received by that broker, which compensation includes anything of value paid or given to the broker in connection with the Life Settlement Contract.

Opulen Capital fully discloses all commissions and fees charged by Opulen Capital in the transaction. This information is disclosed to you in advance of representation and is agreed to by you when you sign the Life Settlement Agent Appointment.

If I enter a Life Settlement Contract, when will I get my money?

Funds will be sent to the Policy Owner usually within three business days after the Life Settlement Provider has received the insurer or group administrator’s acknowledgement that ownership of the Policy or interest in the certificate has been transferred and the beneficiary has been designated in accordance with the terms of the Life Settlement Contract.

What if I change my mind?

Dependent upon state regulations, the Policy Owner has a right to rescind a Life Settlement Contract within three to fifteen days after the date such contract is executed by all parties and the Policy Owner has received the disclosures specified herein. Such rescission exercised by the Policy Owner shall be effective only if both notice of rescission is given to the Provider and the Policy Owner repays all proceeds and any premiums, loans and loan interest paid by the Provider within the rescission period. If the Insured dies during the rescission period, the Life Settlement Contract shall be deemed rescinded, subject to repayment by the Policy Owner or the Policy Owner’s estate of all proceeds and any premiums, loans and loan interest to the Provider.

What happens after I get my money?

After a Policy is sold, all rights and obligations of the Policy are transferred to the Provider. The Policy Owner is no longer responsible for paying premiums and is free to use the cash proceeds however desired.

Entering into a Life Settlement Contract may cause other rights or benefits, including conversion rights and waiver of premium benefits that may exist under the Policy or certificate, to be forfeited by the Policy Owner, and assistance should be sought from a financial advisor.

After the Provider has paid the Policy Owner for the sale of the Policy, the Insured and/or the Insured’s physician and/or other personal contacts designated by the Insured may be contacted by either the Provider, Life Settlement Broker, or its authorized representative for the purpose of determining the Insured’s health status or to verify the Insured’s address. This contact is limited to once every three months if the Insured has a life expectancy of more than one year and no more than once per month if the Insured has a life expectancy of one year or less.

What if I want to obtain another Life insurance policy after I have sold my current Policy?

A change of ownership could limit the Insured’s ability to purchase future insurance on the Insured’s life because there is a limit to how much coverage insurers will issue on one Life.

In addition, the underwriting process for issuing new life insurance policies varies according to the individual insurance carrier. An Insured’s health condition may have changed from the time that the first Policy was issued and now. Consequently, there is no guarantee that the Insured will be able to obtain a new policy or one of acceptable terms. Should the Insured desire to maintain a life policy of some denomination, the Insured should notify the Policy Owner and then proceed in obtaining the new policy before entering into the life settlement transaction.