A life insurance contract is the promise of a fixed sum paid at a future date upon death of the insured in exchange for a number of cash payments (premiums) before that date.  The present value is adjusted for risk using actuarial calculations.  Lapse and persistency factors are determinants.  The present value of the death benefit and premiums are known amounts.  

When a person is diagnosed with a terminal illness or condition where the Life Expectancy is medically determinable, the Life Expectancy is considered impaired.  Actuarial value increases when life expectancy is considered “impaired” or actuarially shorter than when the policy was issued because:

• The present value of the death benefit increases since it will be received sooner than originally projected.
• The present value of the premium payments decrease because they will not continue for as long as originally projected.

This value is significant and calculable through the use of medical underwriting and administrative underwriting.

What then, is purchased?
The investor is purchasing the new actuarial value of the death benefits of the impaired policy.  

• For its present value less a discount for liquidity and for investor profit.  
• At a price greater than the purchase price paid by the insurance company using their surrender schedule.
• At a price less than the present value of competing conservative investments.  

In summary, the investor is purchasing the death benefit at a discount.

As a standard, the minimum investment is $10,000 US for a retail transaction and $25,000 or $50,000 minimum investment on a Cascade Portfolio depending on the country. On occasion, a remaining amount on a given policy may be smaller than that amount and Caribe may choose to accept a lesser sum.

No, the investor owns the rights to all or a portion of the death benefit. Caribe owns the policy. This is necessary in order to pay premiums, make beneficiary changes and file death benefit claims. If the client owned a policy, he or she could appoint another beneficiary or forget to pay a premium. There is no value in policy ownership; the value is only in the beneficiary rights.

The transaction is accomplished through a series of steps:

1. The investor receives and reviews a copy of an Asset Disclosure Exhibit for each policy that Caribe has available with information such as description, returns, and a brief diagnosis review.
2. The investor fills out a reservation form for the policy(s) of their choice.
3. Caribe confirms the reservation for the different policies.
4. The investor fills out a Beneficial Interest Purchase Agreement.
5. The investor writes a check or wire transfer funds to a third-party escrow account set up specifically for the investment transactions.
6. Caribe sends the investor an acknowledgement of the investor’s purchase.
7. Caribe applies the investor’s funds to the portion of the policies the investor has purchased and to the premium reserve account.
8. Caribe issues a notarized Certificate of Irrevocable Beneficial Interest for each policy an investor has made an investment through Caribe.  The closing documents are prepared and sent out to the investor.
9. At each due date, Caribe pays the premiums to the insurance company to keep the policy in force.
10. Caribe periodically tracks the health progress of the insured on a confidential basis so as to determine when the insured is deceased.
11. When Caribe learns that the insured has expired, Caribe files the death benefit claim on behalf of the investor and the insurance company issues a check to the investor for the investor’s portion of the death benefit claim.

View Diagram of Process

Mosaic Caribe Ltd. originally purchases both ownership and beneficiary rights. Caribe then sells off the beneficiary rights to the client and lists each client as a direct beneficiary with the carrier.

The Retail transaction is accomplished through a series of steps:

1. The client receives and reviews a copy of an Asset Disclosure Exhibit for each policy that Caribe has available with information such as description, returns, and a brief diagnosis review.
2. The client fills out a reservation form for the policy(s) of their choice.
3. Caribe confirms the reservation for the different policies.
4. The client fills out a Beneficial Interest Purchase Agreement (BIPA).
5. The client submits the Anti Money Laundering (AML) form to accounting for approval of the transaction. When client or agent receives approval go on to step 6.
6. The client writes a check or wire transfer funds to a third-party escrow account set up specifically for the investment transactions.
7. Caribe sends the client an acknowledgement of the purchase.
8. Caribe applies the funds to the portion of the policies that was purchased, and Caribe transfers funds to the premium reserve account.
9. Caribe issues a notarized Certificate of Irrevocable Beneficial Interest for each policy purchased through Caribe.  The closing documents are prepared and sent out to the client.
10. At each due date, Caribe pays the premiums to the insurance company to keep the policy in force.
11. Caribe periodically tracks the health progress of the insured on a confidential basis so as to determine when the insured is deceased.
12. When Caribe learns that the insured has expired, Caribe files the death benefit claim on behalf of the client and the insurance company issues payment to the clients for their client’s proportional share of the death benefit claim.

The Cascade Transaction is accomplished as follows

1. The client receives and reviews the Cascade Illustration and application.
2. The client fills out the application and verification of funds statement.
3. The client then either submits a check or wire transfer in the amount of their purchase.
4. Caribe sends the client an acknowledgement of the purchase.
5. Caribe applies the funds to the portion of the policies that was purchased, and Caribe transfers funds to the premium reserve account
6. Caribe issues a notarized Certificate of Irrevocable Beneficial Interest for each policy purchased through Caribe.  The closing documents are prepared and sent out to the client.
7. At each due date, Caribe pays the premiums to the insurance company to keep the policy in force up until the date of LE plus 1 additional year.
8. Caribe periodically tracks the health progress of the insured on a confidential basis so as to determine when the insured is deceased.
9. When Caribe learns that the insured has expired, Caribe files the death benefit claim on behalf of the client and the insurance company issues payment to the clients for their client’s proportional share of the death benefit claim.
10. Simultaneously, Mosaic Caribe sends the client a letter informing them of the maturity.  If the client wishes to withdraw funds from the portfolio they must return this letter with instructions within 45 days.

Insurance is monitored and regulated by state insurance departments, and one of their primary objectives is protecting policyholders from the risk of a company in financial distress. When a company enters a period of financial difficulty and is unable to meet its obligations, the insurance commissioner in the company’s home state initiates a process—dictated by the laws of the state—whereby every attempt is first made to help the company regain its financial footing. This period is known as rehabilitation.

If it is determined that the company cannot be rehabilitated, the company is declared insolvent.

If a U.S. Life Insurance company is deemed insolvent then there are several levels of safe guards currently in place. Typically, the carrier is taken over and operated or liquidated by state insurance regulators.  Regulators have the authority to use the Required Reserves which each carrier has on deposit to settle any outstanding claims.   If this amount is not enough then regulators can access a state guaranty fund which each state has in place.   

For more information visit http://www.nolhga.com/policyholderinfo/main.cfm/location/insolvencyprocess

No, Caribe has a servicing agreement with 3rd party providers, and has administrative offices in San Jose, Costa Rica and Boca Raton.

Caribe has established a 3rd party escrow arrangement service.  When the client’s money is received, a portion is allocated to the Purchase Deposit Account and the remaining amount is allocated to the Premium Reserve Account.  Under the terms of the Escrow Agreement, the Escrow Agent is the only party who can write checks to:

• Purchase policies or fractions.
• Pay premiums.
• Invest in safe money market or other liquid instruments until a premium is due.

The Trustee is Goldstein Lewin & Co. a large regional public accounting firm located at 1900 NW Corporate Blvd., Suite 300 East Boca Raton, Florida 33431

Boca Raton - 561-994-5050
Broward - 954-429-8555
Dade - 305-944-3582
Palm Beach - 561-737-0309
FAX - 561-241-0071
info@goldsteinlewin.com  

Goldstein Lewin & Co., Certified Public Accountants and Consultants, provides a broad spectrum of services including tax planning and compliance, wealth preservation and estate planning, technology consulting, software consulting and, accounting and auditing (including SEC and other regulatory agency compliance), business valuation, eldercare, litigation consulting, financial planning through an affiliate, and employee benefits consulting. http://www.goldsteinlewin.com/default.asp

No, the accounts are held in major US banks.

The funds are held in Escrow and can only be released by the agent. Any use of the funds other than for premiums is limited to very liquid purchases. If any client wishes to verify that adequate funds still exist for a given policy, they, at their expense, can have the reserve audited.

If the policy has not matured within the reserve period and a premium waiver is not in effect, the client will be responsible for paying his portion of any additional premiums required. Caribe will notify the client well in advanced of this requirement.

At this time, insurance companies do not withhold any taxes on death benefits paid to beneficiaries. Since Caribe makes each investor a direct beneficiary of their pro-rata share of the policy, the insurance company will issue payment direct to the client. Mosaic Caribe, Ltd. does not give tax advice; is not qualified to give tax advice and unless you, our Caribe agent are so qualified, you should not offer any tax advice whatsoever. Instead, the client is to be advised to seek tax advice from a qualified tax professional.

All servicing questions are handled under contract for Caribe by:
Mosaic Caribe, SA.
Apartado Postal 187-1230 Plaza Mayor
Escazu, 100M al Sur del Centro Commercial Multiplaza, Centro Corporativo Atrium Primer Nivel Local #2
San Jose, Costa Rica
Phone: +(506) 2 201-5332
Fax: +(506) 2 201-5331
Email: info@MosaicCaribe.com

There are several advantages:

• Smaller initial purchase amounts than many competitors.
• Direct appointment as beneficiary on the policy.  
• Faster closing documents because Caribe owns the inventory.  
• Uniform documents for easier processing.  
• Minimal possibility of a rescission.  
• Limited jurisdictional and licensing oversight.  
• Quality products from managers you trust.  
• Excellent gains on assets maturity for clients.  
• Excellent commissions.

Yes, there is a representative agreement and a Standard Operating Procedure.

There are no plans at this time to do so. However, there are plans to offer unique products through Caribe that address many investors and agents needs.

Along with all of the tools and resources located in the Agent Section of the website site, there are PowerPoint slide shows, which are available on disk. There is an 8-panel brochure and an array of analysis tools useful for illustrating the insurance settlement concept.