Life Settlement Institute Supports Secondary Market Life Insurance Premium Financing Programs

LSI acts to raise awareness and concern about elements of certain premium finance programs

Washington, D.C. <ETH> April 4, 2005 <ETH> The Life Settlement Institute today announced that its support for the secondary market for life insurance includes those premium finance programs which utilize the secondary market value of life insurance to enable people with a true need for life insurance to tap into the market value of life insurance. These programs allow policyowners to acquire coverage which provides needed protection for their beneficiaries. The LSI made its announcement in response to questionable elements of certain new non-recourse premium finance programs which may violate insurable interest, usury, life settlement, premium finance, rebating or other insurance and consumer protection laws.

Premium financing has long been a valuable estate planning tool. Well designed and properly administered premium finance programs with secondary market values can and do meet the personal, financial and estate planning needs of qualified insureds. Such secondary market premium financing has been particularly useful in the advanced estate and business planning marketplace in which clients commonly have large insurance needs and assets they do not want to liquidate.

"The secondary market value of life insurance has long been a part of the value of life insurance," said Michael Freedman, President of the Life Settlement Institute. "LSI has always recognized the tremendous value that life settlements afford to life insurance consumers," added Freedman.

LSI also announced that, effective immediately, its members will not purchase policies that had been issued with any of the following elements:

- The lender, directly or indirectly, pays the insured or policyowner any amount at time of issuance of the policy, to purchase the insured's unused insurance capacity.

- The lender or any other party will take ownership at policy inception of any portion of the death benefit in excess of the indebtedness.

- The lender or any other party cloaks or otherwise hides its ownership interest at the time of inception of the life insurance policy.

- The policyowner pays the lender at the maturity of the loan more than the principal and interest, in order to keep the policy.

- A requirement that a policy must be sold in the secondary market to satisfy repayment of the loan.

The secondary market for life insurance has emerged as a substantial benefit for life insurance consumers. Life settlements have given life insurance policyowners over $1 billion over the cash surrender value in unneeded, underperforming or unaffordable policies.

ABOUT LSI

LSI is a trade association dedicated to: increasing the knowledge and awareness on the part of financial planning professionals and advisors of the life settlement industry, increasing the awareness of life insurance policyholders of the option of obtaining more value (where appropriate) for their policy than otherwise would be available from the issuing life insurance carrier, promoting the use of institutional financing in the life settlement industry, supporting laws and regulations that foster the use of such institutional financing and preventing fraudulent or dishonest life settlement transactions.

For more information about the Life Settlement Institute contact Michael D. Freedman (215) 836-8303 or visit www.lifesettlementinstitute.org.