Great answer. The reality is the plan that got everyone to bite, was never backed up with cash flows, updated premiums/reserves and an actuarial lense looking forward. But I doubt the Judge will allow another preying upon your funds, even though $25 million of maturities has been set aside to pay the "professionals" at $600+ per hour. Your returns not only face the pressure of increasing COI, but the unrestrained grab by the plethora of peoples supposedly there to protect your interests. The devil os in the details.
If you have representation, its time for them to provide guidance for whatever they have been paid.
I'm not sure this had to be handled this way and at this expense since bankruptcy.
Anyone see a conflict with Granieri involved considering his former employer was doing the LEs for several years? Not sure of his role right now, but IMHO I wouldn't have him on the bus.
While not an investor n any capacity with this company, I have to assume that's unfortunately the case. I think you're one of many people in this boat however I defer to many much smarter people than me. Folks like Suva, anti and others who are clearly very knowledgeable are who you might want to check with other than an attorney
I've a question: If you don't pay premium, do you lose your ur fraction of policy?
I've been paying premium on time up to this point, but the recent increase is so dramatic (5-fold increases) that I may no be able to pay it.
No LPHI didn't pass the smell test for LISA. I recollect they tried to sue their way in....fail!
There was a decade of warning signs about LPHI and how they conducted themselves. Their 10k and 10Q were filled with indications of things askew. These investors didn't buy LPHI fractionals, they were SOLD them.....and thus much like we now find with annuities, too high of a commission forced the moral hazard..
But what most people don't realize as the lawyers spout about commissions snd fees, a life agent gets upwards of 95% of the first year premium on a life insurance policy as a commission.......in the scheme of things, that's not disclosed and it's miniscule compared to the LS cascade.....
I have a question, likely a naive one. Was LPHI a member of LISA or its successors! While I was never a proponent of that group, given they were all about collecting fees, they still had certain thresholds to join. Anyone in their right mind, something I using very judiciously, knows about term polices and their conversion privileges. While I'm sure LPHI likely screwe around with this as well as everything else, any partially sophisticated investor knows how term policies work. I understand that LPHI likely raped anyone and everyone they could, but come on, at some point the investor needs to accept responsibility for something.
Higher than warranted int rate assumptions can mask COIs too. Some brokers would goose the int rates on illustrations because it suppressed premiums with interest spin off. I think Kurt was playing with his trains too much and allegedly allow parties int the caboose.
This is something we both know, then. The accurate pricing and premium structure of policies is complicated, particularly with the term conversions. I doubt these jokers even read the policies let alone spreadsheet an accurate premium structure. They sold themselves as being experts, but the experts had zero expertise. No wonder these poor investors are getting 4x COI increases.
You're absolutely right. Five policies purchased in 2007 with a LE of 2 to 4 years, all were resold as an investment exactly 2 years after the policy was issued. Hmm.
Have the premiums financed with a rabbinical contract, and you'll have zero put of pocket when the contestability period ends. This was allegedly akin to printing money in Williamsburg/Brooklyn.
I'm not lucky at all. I bought 8 policies from 2005 to 2006 with Cassidy's LE 4-5 years, but so far only 1 policy matured, the other 7 all have outlived the LPI LE by 5 years.
I doubt it goes into distribution until the premium reserves are sufficient to meet whatever cash flow model they devise is satisfied. Why are parties resistant to going after additional licensees?
Under the latest recovery plan, there will be a trust established for recovered funds; these funds will help pay professionals I'm sure, but also will be paid out to investors. In addition to the suit filed against Pardo, the Trustee has also filed a suit against the top 25 licensees. There is resistance to this latest suit from the various investor groups, however, any monies recovered would go into this same trust for eventual distribution. Many of the licensees did help perpetrate the fraud on investors.
Spot on. There were RAPs on some and other loads that could have been managed too.
Variable ULs are in the pool with aggressive assumptions (apart from being securities to begin with) and probably term product that went beyond the conversion option. The CCHs generated by LPI are problematic as the assumptions for the underlying illustrations were never disclosed. I'm not sure why they overloaded premiums on so many policies other than it helped drive commissions for licensees as it elevated the raise.
What was the end game?
We may be able to agree on that, but the answer to the original poster's question is probably much more boring. COI is just one element of UL premium, who knows what else is in these policies? There may be riders or provisions which increase the exposure or face amount, increases in administration, etc. The real problem is that none of us fractionals got a copy of the actual life insurance policies, nor even a summary of the provisions. Moran somewhere pointed out that some very unfortunate investors purchased fractional interests in policies that were basically term products, no cash value. If the insured doesn't die, then there may be no face value! Ouch!!!