Frequently Asked Questions
The Life Insurance Liquidity Options (“LILO”) Program
The amount LILO will pay you is based on several factors, including:
In most cases the amount LILO will advance is considerably higher than the Cash Surrender Value that will be offered by your insurer, but is less than the policy’s death benefit.
There are several stages to the process. Generally, the Life Insurance Liquidity Options process can provide you with a formal offer letter within five days of receiving a completed application and a verification of the eligibility and details of your life insurance policy.
Once you accept the offer, we will need to either change the life insurance policy’s ownership and beneficiary status to Life Insurance Liquidity Options or, collaterally assign the policy to Life Insurance Liquidity Options. This part of the process can take four to six weeks. Once confirmation is received from the life insurance carrier, we can generally advance funds within two business days.
Once approved and processed, you will receive your advance either in a lump sum by cheque or wire to your bank, or periodic payments if that’s what you prefer with direct deposit to your bank account.
There are no application fees or out-of-pocket expenses with the Life Insurance Liquidity Options program. However, if you accept the Life Insurance Liquidity Options proposal, an origination fee may apply, which you will be advised of in your Offer Letter. This fee will vary based on your province of residence and other factors but is generally 3-5% of the amount advanced by LILO. If you select the option to borrow against the death benefit of your policy there is also an interest rate charged. The rate charged, which can vary based on provincial regulations will be disclosed in your Offer Letter. Along with premium payments, the management fee and interest are repaid entirely out of the life insurance death benefit, so there are no out-of-pocket costs to be paid by the insured after the closing of with a Life Advance or Life Settlement.
The funds advanced or offered for purchase under the Life Insurance Liquidity Options program are generally not taxable. However, since each individual situation is unique, and Life Insurance Liquidity Options does not provide tax, legal or financial advice, we recommend you speak with your legal, tax or financial planning advisor.
In order for Life Insurance Liquidity Options to simplify the payment of your policy premiums and maintenance of your life insurance policy, the policy ownership is transferred or collaterally assigned to Life Insurance Liquidity Options. When the life insurance policy matures (the insured dies), the insurance carrier will pay the policy death benefit to Life Insurance Liquidity Options.
You qualify to apply if you have a valid life insurance policy and:
We can accept individual, group and employer-provided term or whole life insurance policies, and no cash surrender value is required. There are several requirements for eligibility, including:
Your credit rating, repayment ability and employment status are not factors we consider. The details of your life insurance policy and perhaps your medical history are the primary factors for consideration.