Glossary
A Collection of Life Settlement Terms & Their Meanings
Escrow Agent means a state or federally regulated financial institution organized under the laws of the United States or any state, whose responsibilities include accepting investor funds, transferring funds in order to purchase policies, paying insurance premiums and receiving death benefits for all policies.
Financing Entity: An underwriter, placement agent, lender, purchaser of securities, purchaser of a policy or certificate from a Provider, credit enhancer, or any entity that has a direct ownership in a policy or certificate that is the subject of a Sales Contract.
Insured: This term means the person covered under the policy being considered for purchase.
Life Expectancy (LE): The number of months the individual insured under the life insurance policy to be purchased can be expected to live as determined by the independent underwriter considering medical records and appropriate experiential data.
Life Settlement: The term today covers the sale, assignment, transfer, devise or bequest of the death benefit or any portion of an insurance policy or certificate of insurance (insuring the life of an individal who does not have a catastrophic or life threatening condition) for compensation less that the expected death benefit of the insurance policy or certificate.
A catastrophic of life threatening condition is an illness or physical condition which can reasonably be expected to result in death in twenty-four months.
Life Settlement Broker: This means a person who, on behalf of an Owner and for a fee, commission or other valuable consideration, offers or attempts to negotiate Sales Contracts, between an Owner and one or more Providers, the subject of which is a Life Settlement.
Life Settlement Provider: This means a Person, other than an Owner, who enters into or effectuates a Sales Contract with an Owner, the subject of which is a Life Settlement.
Net Death Benefit: The amount of the life insurance policy or certificate to be purchased less any outstanding debts or liens.
Owner: This term means the Owner of a life insurance policy or a certificate holder under a group policy. The term "Owner" does not include any Provider or other licensee.
Secondary Markets: These markets do not include a “Provider”, a “Purchaser”, a “Financing Entity”, or a “Special Purpose Entity”, but rather does include any Person who is a qualified institutional buyer or accredited investor.
