Frequently Asked Questions.
Q: Why haven't I heard of life settlements from my financial advisor?
A: Most financial advisors will just represent the products available to them from their firm's inventory. Representing any other investment would be considered "selling away" and could be cause for their dismissal.
Q: It is my experience that 8-10% return is consider very good and have been lead to believe that expecting higher returns can be too risky. Is that the case?
A: Your idea that 8-10% is a very good return is true in investment vehicles based solely on stock market returns and in that arena you will find higher risk looking for a better return. By purchasing life settlements you can potentially receive a much better return without the parity of risk to your investment capital.
Q: Is the success of a life settlement investment subject to influences such as terrorism. stock market volatility, oil prices etc?
A: Not at all, your return on investment is a percentage interest of the death benefits of a life insurance policy which is the contractual obligation of highly-rated insurance companies. The risks and returns associated with life settlements are not correlated to the stock or financial markets, oil prices, interest rates, or other common risk factors that most investments are associated with.
Q: Is Life Partners regulated by any institutional of government agency?
A: Yes. Life Partners Holdings, Inc. is regulated by the SEC (being the only publicly traded company in the Life Settlement business) and Life Partners, Inc. is regulated by the Texas Department of Insurance.
Q: Are the Life Insurance companies, whose policies are purchased, subject to regulation and oversight?
A: Yes. Insurance carriers are regulated by the state department of insurance in which they are domiciled. All products (i.e. policies) must be approved by each state insurance department before they can be in sold that respective sate. All companies are required to participate in a state guarantee fund known as the Legal Life Reserve (In Texas it’s known as the Texas Legal Life Reserve) where minimum reserve balances must be maintained through audit. The legal Life Reserve was enacted by legislature in 1854.
Q: Is Sterling Trust Company regulated?
A: Yes. Sterling is regulated by the Texas Department of Banking and the Securities and Exchange Commission. Its internal procedures and controls are audited by KPMG, LLP. Sterling also complies with the Internal Revenue Service and U.S. Department of Labor regulations.
Q: Who receives my funds (investment) and who pays me?
A: Your funds are received by Sterling Trust and deposited into an account with, where your funds are FDIC Insured up to $100,000 until they are place in an insurance policy. Sterling Trust pays out proceeds based on the distinct share of the policy, which each purchaser owns.
Q: Are there any hidden ongoing management fees?
A: Life Partners, Inc. prices its life settlement transactions to include all transaction fees. That means there are no additional fees or loads paid to LPI added to your initial acquisition cost. However, if you have a qualified account such as a 401K or an IRA and funds are used to purchase the investment, you are required to pay the custodial account fees. Additionally, if you choose to transfer the ownership of your life settlements before they mature, Sterling Trust Company will charge a fee for this service. Also included in the acquisition cost are premiums escrowed for the life expectancy of the insured. If these escrowed amounts are exhausted because the insured lives longer than expected, the purchasers of the policy will have to pay additional amounts for premiums to keep the policy in force.
Q: Can I transfer my IRA funds into a Transferable Insurance Policy Investment?
A: Yes. 70% of all invested money with LPHI is self directed retirement funds.
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