LSI acts to raise awareness and concern about elements of certain premium
finance programs
WASHINGTON, April 4 /PRNewswire/ -- The Life Settlement Institute today
announced that its support for the secondary market for life insurance
includes those premium finance programs which utilize the secondary market
value of life insurance to enable people with a true need for life insurance
to tap into the market value of life insurance. These programs allow
policyowners to acquire coverage which provides needed protection for their
beneficiaries. The LSI made its announcement in response to questionable
elements of certain new non-recourse premium finance programs which may
violate insurable interest, usury, life settlement, premium finance, rebating
or other insurance and consumer protection laws.
Premium financing has long been a valuable estate planning tool. Well
designed and properly administered premium finance programs with secondary
market values can and do meet the personal, financial and estate planning
needs of qualified insureds. Such secondary market premium financing has been
particularly useful in the advanced estate and business planning marketplace
in which clients commonly have large insurance needs and assets they do not
want to liquidate.
"The secondary market value of life insurance has long been a part of the
value of life insurance," said Michael Freedman, President of the Life
Settlement Institute. "LSI has always recognized the tremendous value that
life settlements afford to life insurance consumers," added Freedman.
LSI also announced that, effective immediately, its members will not
purchase policies that had been issued with any of the following elements:
-- The lender, directly or indirectly, pays the insured or policyowner any
amount at time of issuance of the policy, to purchase the insured's
unused insurance capacity.
-- The lender or any other party will take ownership at policy inception
of any portion of the death benefit in excess of the indebtedness.
-- The lender or any other party cloaks or otherwise hides its ownership
interest at the time of inception of the life insurance policy.
-- The policyowner pays the lender at the maturity of the loan more than
the principal and interest, in order to keep the policy.
-- A requirement that a policy must be sold in the secondary market to
satisfy repayment of the loan.
The secondary market for life insurance has emerged as a substantial
benefit for life insurance consumers. Life settlements have given life
insurance policyowners over $1 billion over the cash surrender value in
unneeded, underperforming or unaffordable policies.
ABOUT LSI
LSI is a trade association dedicated to: increasing the knowledge and
awareness on the part of financial planning professionals and advisors of the
life settlement industry, increasing the awareness of life insurance
policyholders of the option of obtaining more value (where appropriate) for
their policy than otherwise would be available from the issuing life insurance
carrier, promoting the use of institutional financing in the life settlement
industry, supporting laws and regulations that foster the use of such
institutional financing and preventing fraudulent or dishonest life settlement
transactions.
For more information about the Life Settlement Institute contact Michael
D. Freedman (215) 836-8303 or visit http://www.lifesettlementinstitute.org.
Contact: Michael D. Freedman
(215) 836-8303
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