There are six key steps associated with the liquidity options process. These include the following:
1. Identifying The Need
The life insurance policy owner realizes that due to their changing life circumstances, their policy is unneeded and/or impractical to their current life situation. By speaking with one of our trained counsellors and / or through independent research, they are informed of the opportunity to access a fair value for their policy today, and realize immediate benefits from their asset.
The policy owner completes a Life Insurance Liquidity Options Inc. application and provides necessary personal, health and policy documentation to LILO Inc. This information is subject to strict privacy guidelines.
LILO’s insurance and medical experts complete their due diligence, determining whether the policy is viable for either a Transfer For Life or an Advancement For Life. The projected life expectancy of the insured, the net death benefit of the life insurance policy, and the terms and conditions of the specific policy are important factors in determining which is the more viable option. At this point, LILO may determine that a policy does not qualify if there is insufficient interest in purchasing or lending against the policy in question. This ends the process.
If LILO decides to make an offer on the policy, it relays the offer to the owner and/or their financial advisor.
5. Closing Package
If the offer is accepted, a closing package of contractual paperwork is delivered to the policy owner and/or their financial advisor for review and signatures.
6. Funds Transfer
Upon written verification of change of beneficiary/ownership in the case of a Transfer For Life or a beneficiary/collateral assignment in the case of an Advancement For Life, funds are transferred to the current policy owner from an Escrow Account.
When the transaction is complete, the lender or buyer – depending on the option selected - becomes the irrevocable beneficiary and potentially the new owner of the life insurance policy, pays future premiums and collects the death benefit when the insured dies. The proceeds of the sale can be used in any manner the seller sees fit. In the Borrowing Option residual funds will be repaid to the designated residual value beneficiaries.