Frequently Asked Questions

The more you know about how the Life Insurance Liquidity Options program works, the better you and your family can make a timely and informed financial decision.  Attached are some of the most frequently asked questions we receive, however if you have any of your own questions, please don’t hesitate to call us toll-free at (866) 888-5456, or you can email your question to info@lilo.solutions.  We look forward to helping you!

The Life Insurance Liquidity Options (“LILO”) Program

How does the Life Insurance Liquidity Options program work?

Life Insurance Liquidity Options has pioneered innovative financial solutions for individuals or companies who wish to utilize their life insurance assets now, in a manner that many don’t realize is possible. Life Insurance Liquidity Options will review your existing life insurance policy(s) and determine if it can be used as collateral for an advance or if it is eligible for an outright sale. If you qualify, Life Insurance Liquidity Options will offer you access to the Fair Value of your policy either through an advance or by purchasing your policy and in either case will take over the premium payments of your policy.

How is the amount of the Life Insurance Liquidity Options advance or outright purchase determined?

The amount LILO will pay you is based on several factors, including:

  • The projected life expectancy of the insured
  • The net death benefit of the life insurance policy
  • The projected amount of remaining life insurance policy premium payments
  • The type of policy and specific life insurance company

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.

Are there any restrictions on how I use the proceeds from my advance or outright purchase?

No, there are no restrictions on how you use the funds advanced to you.  The money is yours to use as you wish.

If I receive an advance, how will I repay the advanced amount to Life Insurance Liquidity Options?

All advances, interests, origination fees and premium payments are repaid to Life Insurance Liquidity Options out of the life insurance policy’s death benefit.

How long does the Life Insurance Liquidity Options process take?

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.

How will I receive my Life Insurance Liquidity Options advance or the proceeds of sale to Life Insurance Liquidity Options?

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.

Who pays the premiums on my life insurance policy?

Life Insurance Liquidity Options will take over payment of all remaining premiums on your life insurance policy whether you choose a Life Advance or a Life Settlement.

Are there fees associated with a Life Insurance Liquidity Options advance or outright purchase?

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.

Will I have to pay taxes on the advance offered by LILO?

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.

What happens to my life insurance policy proceeds?

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. 

In the case of a Life Advances, Life Insurance Liquidity Options will use those proceeds to repay the outstanding balance and will return any surplus proceeds to your designated beneficiary.  In the case of a Life Settlement, a portion of the death benefit may be retained for your beneficiaries which will be paid to them after being received by Life Insurance Liquidity Options.

If I choose to take a Life Advance on my policy, will I be able to pay back my advance early?

Yes.  If your financial situation changes, you can choose to pay back your advance (and costs incurred during the period, like premiums and management fees) at any time, without any pre-payment penalties.

If I choose to sell my policy, will I be able to buy it back from Life Insurance Liquidity Options?

There are no stipulations in the Life Insurance Liquidity Options contract that oblige it to sell a policy back to the original seller. However, the insured on a policy can contact Life Insurance Liquidity Options if they would like to engage on this matter.

Qualification

How do I qualify for the Life Insurance Liquidity Options program?

You qualify to apply if you have a valid life insurance policy and:

  1. Are over the age of 70 (both insured’s if a joint, last to die policy) or
  2. Are under age 70 and believe that you have a significant medical issue that will significantly impair your longevity
Life Insurance Liquidity Options must assess each application for a Life Advance or Life Settlement or its own merits and not every situation will result in an Offer.

What types of life insurance policies will Life Insurance Liquidity Options accept?

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 life insurance policy must be issued by a Canada-based life insurance company
  • Your policy must be transferable or collaterally assignable to Life Insurance Liquidity Options
  • Your policy must have been issued at least two years prior to your application forthis program.
  • You must have one or more life insurance policies with a total death benefit of at least $100,000

If I’m unemployed or don’t have a good credit rating, can I still qualify?

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.

What if my medical status changes before I receive the Life Advance or Life Settlement from Life Insurance Liquidity Options?

If your medical status changes drastically before you are extended funds, the advance amount or amount offered for outright sale may be opened for re-evaluation. Clients and Life Insurance Liquidity Options are usually in frequent contact during the stages before any funds are advanced, so any changes will be quickly incorporated into Life Insurance Liquidity Options’ forecasts and communicated.

Privacy

Who will have access to my medical information?

In the course of carrying on its business, Life Insurance Liquidity Options Inc. (“LILO”) necessarily acquires and maintains nonpublic personal information, including highly sensitive medical information, about its potential applicants, actual applicants and customers. Although LILO is not a ‘health information custodian’ (as that term is used in the Personal Health Information Protection Act, 2004 of Ontario), LILO does obtain, use and disclose ‘personal health information’ (again as that term is used in the Personal Health Information Protection Act, 2004 of Ontario) in order to conduct its business – and thus LILO has established and implemented a privacy policy to safeguard the personal health information that it receives.

All officers and employees of LILO, as well as any contractors, consultants, agents or affiliates engaged by LILO to assist in its business (all together the “officers, employees and contractors”), are expected to adhere to LILO’s privacy policy. This means that they are permitted to use personal health information only for the business purposes of LILO. Each officer, employee and contractor, as a necessary condition of employment or engagement with LILO, is subject to the same requirements for the protection of such personal health information. 

To that end, LILO employs and maintains physical, electronic and procedural safeguards to guard individuals’ personal health and financial information and to restrict its use and disclosure to LILO’s officers, employees and contractors who need to know and use such information. LILO will dispose of the personal health and financial information, when it is no longer needed for the business tasks, by modifying the information to make it unreadable or undecipherable, by erasing, shredding or other means. LILO may also dispose of such information by contracting with a third party vendor engaged in the business of disposing of records.

Who will have access to my confidential, personal and financial information?

All insurance policy information including that specific to the insured individuals named on a policy are maintained in the strictest confidence at LILO. We are advocates of strong regulation and support the highest standards of conduct because we know securing consumer trust ensures the industry’s long-term success.

Please refer to the section on confidentiality of medical information for LILO’s privacy policies.

Need help?

Call us at (866) 888-5456
Mon - Fri: 9.00 am - 5.00 pm
Or email us at info@lilo.solutions