Method for facilitating the acquisition of a life insurance policy

• US 20060206415A1
• Filed: 03/08/2006
• Published: 09/14/2006
• Est. Priority Date: 03/08/2005
• Status: Abandoned Application

• Current Assignee: Mark Ross
• Original Assignee: Mark Ross
• Inventors: Ross, Mark
• Application Number:
  US11/370,695
• Publication Number:
  US 20060206415A1
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

The invention provides a novel method of facilitating the acquisition of a life insurance policy on the life of an insured. The method involves interaction among a borrower, a lender, a service provider and a collateral agent. Using the inventive method of the present invention, the borrower is able to acquire funds, on an non-recourse basis, from the lender for payment of one or more premiums on the life insurance policy with minimal impact on liquidity. The service provider agrees to provide certain services to the borrower under a service agreement during the term of the service agreement; the borrower'"'"'s obligations under service agreement are non-recourse. The life insurance policy and its proceeds are held as security for the borrower'"'"'s obligations to the lender and the service provider by a collateral agent.

Claims

1. A method of facilitating the purchase of a life insurance policy by a borrower, the method comprising:

acquiring a life insurance policy on the life of an insured, said acquisition comprising payment of a premium for said life insurance policy;

receiving a loan of a principal amount from a lender, wherein said principal amount is greater than or approximately equal to the amount of said premium;

executing a non-recourse note for said principal amount in favor of said lender;

entering into a service agreement with a service provider, said service agreement comprising a term, wherein said service provider agrees to purchase said life insurance policy in a private sale during a private sale period for a private sale purchase price and wherein said borrower agrees said service provider shall be entitled to receive a servicing fee if said insured dies during said term; and

entering into a security agreement with a collateral agent, said lender and said service provider, wherein said collateral agent agrees to hold said life insurance policy and any proceeds of said life insurance policy as security for said borrower'"'"'s obligations to said lender under said non-recourse note and for said borrower'"'"'s obligations to said service provider under said service agreement, and wherein said borrower, said lender, service provider and said collateral agent agree said borrower shall be entitled to redeem said life insurance policy during a redemption period for a redemption price.

2. The method of claim 1, wherein said non-recourse note further comprises a maturity date and provisions for accrual of interest on said principal amount at an interest rate to said maturity date.

3. The method of claim 2, wherein said security agreement further comprises an expiration date that is after said maturity date of said non-recourse note.

4. The method of claim 3 wherein said non-recourse note further comprises an effective date and wherein said maturity date of said non-recourse note is between approximately two years and approximately three years after said effective date.

6. The method of claim 4 wherein said expiration date of said service agreement is between approximately fours years and approximately six years after said effective date of said note.

7. The method of claim 1, wherein said borrower is a trust having assets created by a grantor.

8. The method of claim 7 wherein said grantor will not be treated as owner of any of said assets of said trust for income tax purposes.

9. The method of claim 1, said method further comprising

redeeming said life insurance policy by paying to said collateral agent the redemption amount.

10. The method of claim 1, said method further comprising

selling said life insurance policy to said service provider in a private sale for the private sale purchase price.

11. The method of claim 1, wherein said borrower agrees in said service agreement that said service provider shall be entitled to receive a base commission if said life insurance policy is sold in a life settlement sale during said term of said service agreement.

12. The method of claim 11, said method further comprising

receiving a bid from a purchaser for the life settlement sale of said life insurance policy at a purchase price;

accepting said bid; and

selling said life insurance policy to said purchaser for said purchase price.

13. A method of facilitating the purchase of a life insurance policy by a lender, the method comprising:

lending to a borrower, said borrower having acquired a life insurance policy on the life of an insured wherein said acquisition comprises payment of a premium for said life insurance policy, a loan of a principal amount, wherein said principal amount is greater than or approximately equal to the amount of said premium;

receiving from said borrower an executed non-recourse note for said principal amount in favor of said lender, said non-recourse note comprising a maturity date and provisions for accrual of interest on said principal amount at an interest rate to said maturity date;

facilitating a service agreement between said borrower and a service provider, said service agreement comprising a term, wherein said service provider agrees to purchase said life insurance policy in a private sale during a private sale term for a private sale purchase price, wherein said borrower agrees said service provider shall be entitled to receive a base commission if said life insurance policy is sold in a life settlement sale during said term, and wherein said borrower agrees said service provider shall be entitled to receive a servicing fee if said insured dies during said term; and

entering into a security agreement with a collateral agent, said borrower and said service provider, wherein said collateral agent agrees to hold said life insurance policy and any proceeds of said life insurance policy as security for said borrower'"'"'s obligations to said lender under said non-recourse note and for said borrower'"'"'s obligations to said service provider under said service agreement, and wherein said borrower, said lender, service provider and said collateral agent agree said borrower shall be entitled to redeem said life insurance policy during a redemption period for a redemption price.