State of California
Department of Insurance
Life Settlement Licensee
Disclosure to Life Settlement Applicant
(To be provided no later than at time of application for any life settlement contract)
You should carefully read all of the following points and seek financial, insurance,
tax and other advice where appropriate.
1. There may be possible alternatives to life settlements which exist and include, but are
not limited to, accelerated benefits options that may be offered by your life insurer.
2. Some or all of the proceeds of a life settlement may be taxable. Assistance should
be sought from a professional tax adviser.
3. There may be an impact on the receipt of public assistance. The recipient should contact
the State Department of Health Care Services and the State Department of Social
Services under Section 11022 of the Welfare and Institutions Code for further information.
4. Proceeds from a life settlement could be subject to the claims of creditors.
5. Entering into a life settlement contract may cause other rights or benefits, including
conversion rights and waiver of premium benefits that may exist under the policy or
certificate of a group policy to be forfeited. Assistance should be sought from a
financial adviser.
6. Entering into a life settlement could limit the insured’s ability to purchase life insurance
in the future because there is a limit to how much coverage insurers will issue on one
7. The owner has a right to rescind a life settlement contract within thirty (30) days of the
date it is executed by all parties and the owner has received all required disclosures, or
fifteen (15) days from receipt by the owner of the proceeds of the life settlement,
whichever is sooner. Rescission will only be effective if both notice of rescission is given
and all proceeds and any premiums, loans, and loan interest paid on account of the
provider are repaid within the rescission period. If the insured dies during the rescission
period, the contract shall be deemed to have been rescinded subject to repayment by
the owner or the owner’s estate of all proceeds and any premiums, loans, and loan
interest to the provider.
8. Proceeds will be sent to the owner within three (3) business days after the provider has
received the insurer or group administrator’s acknowledgement that ownership of the
policy of the interest in the certificate has been transferred and the beneficiary has been
designated in accordance with the terms of the life settlement contract.
9. All medical, financial, or personal information solicited or obtained by a provider or
broker about an insured, including the insured’s identity or the identity of family
members, a spouse, or a significant other may be disclosed as necessary to effect the
life settlement contract between the owner and provider. If you are asked to provide this
information, you will be asked to consent to the disclosure. The information may be
provided to someone who buys the policy or provides funds for the purchase. You may
be asked to renew your permission to share information every two (2) years.
10. The insured may be contacted by either the provider or the broker or its authorized
representative for the purpose of determining the insured’s health status or to verify the
insured’s address. This contact is limited to once every three (3) months if the insured
has a life expectancy of more than one (1) year, and no more than once per month if the
insured has a life expectancy of one (1) year or less.
11. The broker represents the owner, exclusively, and not the insurer or the provider or any
other person, and owes a fiduciary duty to the owner, including a duty to act at any times
according to the owners’ instructions and in the best interest of the owner.
12. The name, business address, and telephone number of the life settlement broker are as
(brokers’ printed name)
(telephone number)
13. The following affiliation(s) or contractual relation(s) exists between the provider and the
broker: _______________________________________________________________.
14. The following affiliation(s) or contractual relation(s) exists between the provider and with
the issuer of the policy to be settled: ________________________________________.
understand this disclosure form. I have received a copy of this disclosure to keep for
my records.
By: _____________________________ By: _____________________________
Printed Name: ____________________ Printed Name: ____________________
Date: ___________________________ Date: ___________________________