2
Introduction
Many experts teach that long-term investment goals are best achieved with a properly diversified approach to asset management. A long-term portfolio should consist of a mixture of non-traditional assets such as real estate and alternatives, along with traditional assets such as stocks, bonds and commodities. A truly unique alternative asset class to consider is Life Settlements, which are U.S. life insurance policies sold by the original owner.
Mosaic Alternative Assets is the leading distributor of Life Settlements outside the United States. Mosaic delivers client-oriented products that add all-important diversity to any long-term portfolio through non-correlated returns and attractive overall capital growth potential.
Your Mosaic-licensed Sales Agent will show you how Life Settlements can help you achieve your long-term goals.
Information contained in this document is intended solely for Accredited Investors who have the resources, financial aptitude, and experience relating to investments in illiquid, complex products. Mosaic Alternative Assets Ltd. does not manage client assets, nor does it give any investment or financial advice, and nothing in this brochure shall be construed as such. Investors must consult their own legal, tax and financial advisors in making a determination on the appropriateness of this asset class in meeting their financial goals.
This document is provided for information purposes only and is not an offer to buy or sell any investment or financial product. Information and other disclosures regarding the product described herein should be obtained from the product disclosure documents provided prior to purchase, all of which should be read and understood in their entirety. These documents may be obtained from Mosaic Alternative Assets Ltd.
Purchases should only be made only by those who fully understand and are willing to assume the risks associated with this product. The product mentioned in this brochure has not been approved or disapproved by any regulatory authority of any jurisdiction. No sales person, agent or other person is authorized to provide information or make representations not contained in product disclosure documents.
Puerto Rico
PMB 309*35 Juan C Borbon, STE 67 Guaynabo, PR 00969-5375
Telephone: +1 (787) 789-1010 Fax: 1+ (787) 287-1622
Mosaic Alternative Assets Ltd.
Apartado Postal 187-1230 Centro Comercial Plaza Mayor San Jose, Costa Rica
Telephone: +1 (866) 724-2476 Fax: +1 (561) 431-6280 www.MosaicAlternativeAssets.com AFFILIATED OFFICES: United Kingdom Forsyth House Cromac Square Belfast BT2 8LA Telephone: +44 28 9051 1221 Fax: +44 28 9021 8001
Life Settlements can be an important
part of a diversified long-term portfolio
for:
• meeting personal investment goals
• building retirement wealth
• planning an estate
• funding charitable giving
The Next Generation of
Life Settlements
4
In 1911, Justice Oliver Wendell Holmes, Jr. wrote the U.S. Supreme Court opinion, which held that a life insurance policy has the characteristics of property which can be sold by the owner without hindrance (Grigsby v. Russell, 222 U.S. 149 (1911). A “Life Settlement” is a U.S. life insurance policy that is sold by its original owner into the secondary market.
The seller is usually an elderly person who no longer needs the insurance policy or no longer wishes to pay the ongoing premiums. Academic studies show that a seller can often realise over four times the cash surrender value of the policy by selling into the marketplace, but many policy owners are not aware of this.
Mosaic purchases life insurance policies that fall within a rigorous set of parameters: universal life or convertible term life policies that have been in force for at least two years on someone typically over 70 years of age, and usually over 80, with all documentation properly in place. Policies on elderly
persons with reasonably quantifiable life expectancies due to specific medical conditions are the most attractive to investors.
Mosaic offers qualified Accredited Investors the opportunity to purchase fractional interests in Life Settlements. Every Mosaic policy is issued by a U.S. insurance carrier rated “A-” or better by either A.M. Best, the industry’s leading insurance company ratings agency, or Standard & Poor’s. The insured’s medical records are further scrutinized by nationally recognised independent life expectancy estimation firms that assign an estimated mortality date (i.e., the projected maturity date) to each policy.
Like zero-coupon bonds, Life
Settlements are purchased at an attractive discount and pay out the full face value at their maturity. However, while capital preservation is assured, the maturity date is not fixed and premiums must be paid to keep the policy in force for the duration of the policy until maturity.
Mosaic purchases select life insurance policies and sells portions of the policy death benefit to multiple clients
(commonly referred to as
“fractionalization”). Mosaic purchases policies with at least one recent life
expectancy estimate.1 Life expectancy
estimates are used to establish the initial premium escrow period for the policies (the “Premium Escrowed Through,” or PET, period). Mosaic is responsible for the payment of policy premiums, servicing and escrow fees for each policy during its PET period, which is disclosed to each client at the time of purchase. Mosaic provides its clients with recent life expectancy estimates available to Mosaic at the time of purchase (redacted as required by law). From time to time, Mosaic may find it necessary to obtain an updated life expectancy estimate on a policy. Typically, this occurs after the PET period for the policy has expired. Updated life expectancy estimates obtained by Mosaic are generally available to clients with an interest in the policy upon request.
Client funds for the purchase of policy interests are deposited directly into the Purchase Deposit Escrow Account, which is held and maintained by a third-party escrow agent according to a written escrow agreement. Upon closing of the purchase transaction, the funds are applied to pay the costs of acquiring the policy, fees and commissions, and to fund the escrow of premiums, policy servicing and escrow fees through the PET date.
Mosaic engages a separate third-party escrow agent to hold and maintain the Premium Reserve Escrow Account, as well as to receive and distribute the proceeds of policy claims upon maturity. The escrow agent is a federally insured bank or financial institution, and is designated as the beneficiary of record of each policy on the books of the insurance carrier. Maturity proceeds are
1A Life Expectancy for a Life Settlement is a
statistical estimate of the average term that a population group (in which the insured falls) will live; it is made by an established life expectancy estimation firm such as 21st Services, American Viatical Services, EMSI, or Fasano Associates. Each firm has different estimation methodologies, parameters and processes, resulting in sometimes widely varying estimates on the same life.
paid by the insurance company directly to the escrow agent and placed in an escrow account. The escrow agent then distributes those proceeds directly to the clients entitled to receive their share of the policy proceeds.
Upon the later to occur of the expiration of the PET period or the depletion of the funds escrowed by Mosaic for the premium reserve account for a policy, it becomes the client’s responsibility to pay the client’s pro rata share of premiums, servicing and escrow fees into the Premium Reserve Escrow Account as they come due.
Policies purchased by Mosaic for the sale of fractional interests are held in a private trust, which is maintained and administered by an independent trustee company subject to a written declaration of trust. The trust is the owner of record with the insurance company that issued the policy. Original policies are placed in the custody of the trustee company upon acquisition and are held for the benefit of the clients of Mosaic who hold an interest in the death benefit of the policy. As separate assets of the trust, the policies are not subject to any claims of creditors or other parties against Mosaic or its affiliates.
Upon maturity of a policy, the trust submits the claim to the insurance company for processing and payment to the beneficiary of record on the books of the insurance company. Mosaic assists the trust in submitting the claim and tracks the payment to the beneficiary escrow agent. To assist clients in the growth of their well-diversified portfolio of fractional interests, Mosaic offers suitable Mosaic Life Settlement policies for re-investment, or clients may elect at that point to receive a distribution of some or all of the maturity proceeds. Life Settlements are a unique asset brought to its full investment potential through Mosaic’s extensive market expertise and state-of-the art processes and technology. Mosaic provides a comprehensive solution to allow clients to include Life Settlements as an important part of their long-term financial portfolio.
Many clients build a substantial capital
base through re-investment of the
proceeds, creating a highly-diversified
portfolio of fractional positions.
PROFIT FROM LIFE SETTLEMENT MARKET
SURRENDER VALUE POLICY PURCHASE PREMIUMS PURCHASER SELLER SURRENDER VALUE Extra Benefits Purchase Principal Policy Benefit (Maturity)
Purchasing a
Senior Life
Settlement Policy:
How it works
Most experts advise that the best way to build attractive, consistent returns with Life Settlements is to hold as diverse an array of policy exposures as possible. Mosaic offers clients an efficient way to do this through fractional interests in a variety of Life Settlements via its Cascade Portfolio™ line of products.
The returns for a Life Settlement are a function of a policy’s life expectancy, which is an educated estimate based on all available knowledge concerning the insured, his or her actuarial population group and projected medical outcomes. The history of actual maturities for Mosaic and its affiliated companies shows that, like a bell curve, approximately half of all policies matured before the life expectancy date and half after. This is an indication of the high quality of the estimates used and further supports the investment strategy of a diversified portfolio of Life Settlements. Fractional interests enable this diversification most effectively and efficiently.
Building a portfolio of Life Settlement positions with differing characteristics enhances the prospective outcomes. Shorter life expectancy projections suggest a greater probability of short-term gains on policy maturities, while longer projections can provide higher overall returns as they generally can be purchased at a lower cost and have a better chance of maturing early. A typical balanced Cascade Portfolio™ may have, say, three paths of life expectancy ranges: less than 48 months, 48-72 months, and over 72 months.
With Mosaic’s Cascade Portfolio™, an investor would achieve three levels of diversification:
i) Life Settlements as a unique alternative asset class;
ii) across multiple life expectancy paths with different characteristics; and iii) within each life expectancy path. The following diagram demonstrates this:
A Portfolio
Approach to
Life Settlements
1st Generation
2nd Generation
3rd Generation
Path 1: under 48 months Life Expectancy Path 2: 48-72 months Life Expectancy Path 3: over 72 months Life Expectancy
Initial Portfolio:
Dispersion of Life Expectancy Maturities
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Holding several life expectancy paths of Life Settlements can produce an attractive overall return, as demonstrated by actual recent maturities of policies from Mosaic. This chart shows all 11 matured positions over a 1-year period ending September 30, 2013. The bars show the actual annualised return for each matured position, and the magenta line shows the aggregate annualised return (assuming the same amount purchased for each
position).
The example portfolio depicted above would have provided the client an overall annualised return of 17.23%. (This is calculated using net proceeds and does not take into account compounding of the returns, re-investment with the proceeds, or any variance in premium cost.)
Mosaic products may be excellent assets for:
Achieving personal investment goals
Life Settlements are a unique alternative asset class offering non-correlated performance opportunities unlike any other tool available to investors to meet
their overall financial planning
objectives. A Cascade Portfolio™ can be used effectively as an integral part of a well-planned investment strategy to
attain both short- and long-term goals.
Building retirement wealth
Because the maturity pay-out is assured by a top-rated insurance carrier, Life Settlements provide preservation and growth of capital that builds through a Cascade Portfolio™.
Planning an estate
As part of a portfolio of investments, Life Settlements can be used for
inter-generational planning options
supported by the nature of the asset’s longer-term maturity horizons.
Funding charitable giving
Making a donation of Life Settlements can provide substantial gains as maturities occur; the giver can structure the donation to continue for
70%
60%
50%
40%
30%
20%
10%
0%
-10%
Annualised Return Example
Mosaic provides
industry-leading services
that enable
a client to easily implement
and manage a portfolio
approach to Life Settlements
Safety of Capital
• Policies backed by
top-rated insurance carriers
• Legally documented
ownership of fractional
interests
• Escrow Agent manages
all client monies
• Peace of mind due to
passive nature of holding
a defined benefit
any period of time through controlled re-investment of the maturities.
Specific capital goals can be
established that, once reached, provide the basis for distribution to selected beneficiaries.
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Mosaic Life Settlements provide many benefits, notably:
1. Non-correlated returns.
Life Settlements have little or no correlation with any other asset class, such as stocks, bonds, commodities or real estate; nor are they likely to be affected by politics, natural events, financial crises, or uncertainties that affect other investment assets.
• Volatility of a portfolio is reduced
overall because the return of a Life Settlement is affected by factors unrelated to other assets.
2. Passive, protected capital growth.
Unlike managing other real assets, such as rental properties, Mosaic’s Life Settlement products are maintained for you through maturity, at which time the pay-out is always at the policy’s peak value. The policies are guaranteed by an “A-” or better rated insurance carrier that is rigorously regulated by each state in which it operates
• Capital preservation is achieved
through a policy’s fixed face value regardless of external circumstances.
3. Exceptional performance potential.
Studies of the Life Settlements industry show annual average returns of a well-diversified holding in excess of 12%, and Mosaic’s performance has exceeded 17%
per annum.2Holding a portfolio of Life
Settlements with varying characteristics and life expectancies increases the probability that it will produce similar overall returns.
• Diversification of a portfolio’s
return profile will help balance overall outcomes under a variety of scenarios.
Benefits of a Portfolio of Mosaic
Life Settlements
Studies of the
Life Settlements industry
show annualised returns
well in excess of 12%,
and Mosaic’s performance has
exceeded 17% since its inception.
2An un-audited analysis of all policy positions sold by Mosaic Alternative Assets from January 2002
through December 2014 shows an overall annualised return of 17.23% if held to maturity. (This is calculated using net proceeds and does not take into account compounding of the returns, re-in-vestment of the proceeds, or any variance in premium cost.)
The unique combination of capital preservation with
non-correlated and attractive overall returns appeals to many
types of investors with different principal objectives:
Accredited Individuals:
portfolio diversification
Wealth Managers:
safe-guarded capital growth
Family Offices:
generational capital preservation
Pension Funds:
meeting future disbursement needs
Endowments & Foundations:
building a capital base
Asset Managers:
unique asset characteristics
Purchasers of
Mosaic Alternative Assets Ltd. was established in 2003 with the vision of promoting international sales of Life Settlement products. Mosaic has led in the development of products that capture the benefits of Life Settlements in a client-friendly manner. This has enabled sales in 36 countries and led to product innovations that make Life Settlements a better opportunity for any Accredited Investor.
When Janice Winters assumed the role of CEO in 2008, she instituted a radical improvement in policy screening and selection, and in how client interests are
managed and protected.
Advancements included making all documentation available online, facilitating improved customer service, and developing a new generation of products that specifically focus on matching the best features of the asset with the best interests of the client. Mosaic distinguishes itself by proactively
embracing compliance requirements in jurisdictions where we offer our products. We are committed to working with
regulatory authorities within the
regulatory framework of each jurisdiction, leading the industry in bringing Life Settlements within the reach of every Accredited Investor.
We believe that the Life Settlements industry is rewarding to both the sellers of policies and the investors who purchase them. Helping senior citizens realise value for their unwanted assets can generate funds for additional medical treatment, significant family events, or a better lifestyle in their retirement. Similarly, helping Accredited Investors add Life Settlements can bring significant value to their long-term portfolios. Offering a uniquely-structured set of products and focusing on providing industry-leading client services to investors, Mosaic is perfectly positioned to become the market leader in fractional Life Settlements.
Who is Mosaic Alternative Assets?
Asset transparency
To allow clients the opportunity to choose Life Settlements that will help them achieve their investment objectives, Mosaic provides unmatched transparency on each policy offered, including i) a comprehensive policy summary, ii) actual life expectancy reports (redacted as necessary) from leading providers, iii) a return sensitivity analysis, and iv) a record of health updates throughout the term of the policy, which continue after it has been purchased.
Client support
Mosaic places the client first in everything we do. Clients can manage their holdings either with traditional documentation or fully online. Reports include account details and transactions, relevant policy documentation, health status updates, policy premium status updates and comprehensive portfolio summaries. Working online, all Life Settlement offerings are provided in real-time, premium and fee obligations can be paid with a debit or credit card, and all client interactions are permanently recorded for action by your Sales Agent with the support of Mosaic.
Agent support
Mosaic works with each sales agent to build in-depth knowledge of the asset class, its mechanics and how Life Settlements fit into a long-term financial portfolio. Ongoing product education and training ensures each agent can provide the quality of client service that Mosaic demands and clients expect. From the initial agent engagement to compliance support, asset selection and purchase closing, every aspect has been automated and can be performed online.
Product innovation
Mosaic promotes Life Settlements as a valuable part of any well-structured long-term portfolio, with extensive experience in constructing various Life Settlement products that meet specific client objectives.
Best-in-class partners
Working with the leading providers in life insurance, policy acquisition and tracking, life expectancy underwriting and escrow services; Mosaic and its Sales Agents seek to provide each client with personalised care as they embrace this exciting asset class.
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Mosaic is introducing
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Liquidity Risk.The issue of liquidity is essential to determining how much to commit to a portfolio of Life Settlements. Purchasing a whole or fractional interest means that funds are committed until that insurance policy matures. There is no established tertiary market in the asset. Clients should not, under
any circumstances, commit funds that they cannot afford to leave in the portfolio until each policy matures, which may take several years. Clients should
think of this as a forced savings plan that is “untouchable” until it has accomplished its long-term goals.
Life Extension Risk.The value of any Life Settlement is determined upon its life expectancy estimates, which are based on the underlying health characteristics of the insured life. This estimate is determined by an established life expectancy estimation firm using accurate medical evaluations and conservative actuarial analyses. Despite these tools, every life expectancy is based on a set of probabilities and is therefore uncertain. In a given set of circumstances, any one individual may live longer or shorter than the life expectancy estimate derived from the analysis.
This is why clients are encouraged to purchase positions in as many different policies as possible when constructing their Life Settlements portfolio. This exposure helps to balance the various outcomes, where a late maturity of one position is more likely to be offset by the early maturity of another.
Taxation. Life Settlements are Beneficial Interests in secondary life insurance policies. Upon maturity and pay-out of the death benefit, the proceeds will be paid by the insurance company directly to an Escrow Agent for disbursement to the owners of the beneficial interests.
Mosaic believes a transaction of this nature could be considered a transfer for value and, therefore, may be considered a taxable event, depending on the tax situation specific to each individual client. It is up to the client
to determine if taxes are due in the tax jurisdiction(s) where they are a tax subject. Mosaic is not an accounting firm, is not competent to give tax advice, and this document should not be relied upon as tax advice. The client should discuss this purchase with their own tax advisor.
Key Considerations in
Purchasing Life Settlements
3
3 These selected risks are characteristic of the
asset class; a full discussion of risks to consider is provided in the offering documents.
Frequently Asked Questions
1. How are Life Settlements different from other assets?Life Settlements are unique because they are virtually non-correlated to any other asset class, offer the potential for exceptional returns and provide capital protection via pay-out guarantees from top-rated insurance companies on their policies. Thus, Life Settlements are an excellent complement to most long-term portfolio objectives, as they offer diversification and an attractive risk-reward profile.
2. What are the risks of Life Settlements?
In summary, the principal risks of all Life Settlement products are the uncertainty of when the policy will mature, increases in premiums as the insured advances in age during the term of the policy, and the lapse of a policy if premium payments are not properly maintained. A detailed discussion of risks is provided in the product disclosure documents, which should be read and fully understood by clients prior to purchase. Mosaic has designed its Life Settlement products in a manner that it hopes will minimize these and other associated risks as much as possible. However, it is impossible to eliminate these risks entirely.
3. What is the likelihood that a Life Settlement policy will exceed the life expectancy estimate?
It is almost certain that an insurance policy will mature either before or after any estimated life expectancy. Advances in medicine, improved lifestyle and changed medical circumstances are just three factors that can alter the life expectancy of any person, either improving their prospects or diminishing them. An investment in Life Settlements should be carefully considered as they are illiquid and the owner may be required to make additional premium payments after the policy’s Premium Escrow Account is depleted.
4. What kind of returns on my investment can I expect?
Historically, the Life Settlements asset class has provided exceptional returns if held to maturity. Mosaic Alternative Assets has realised an aggregate annualised return of over 17% on all Life Settlement positions. Although Mosaic cannot guarantee actual portfolio performance and returns, the annualised return target for a diversified portfolio of Life Settlements can exceed 10%, depending on its composition.
5. What is required to purchase fractional interests in Life Settlements?
A qualified Accredited Investor must acknowledge an understanding of the Mosaic product and product disclosure documents. Upon completion of a Purchase Application, which includes an Investment Plan for the client’s overall objectives of this investment, the client will be offered a selection of appropriate fractional interests in life insurance policies that are suitable for the client’s long-term objectives.
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A separate Escrow Agent maintains the Premium Reserve Escrow Account for the timely payment of a policy’s premiums and servicing fees throughout the term of the policy. The account is initially funded by Mosaic at the time of purchase and the client is only responsible to pay premiums and servicing fees if the account becomes depleted after the PET period has expired.
2. Independently verify the transaction details
Critical to any Life Settlement transaction is verification that the beneficial ownership of the policy has been changed and properly recorded by the insurance carrier, ensuring that the proceeds at maturity will be distributed correctly.
3. Maintain custody of the client’s interests in Life Settlements
A Life Settlement policy is typically divided into fractional interests that are owned by many clients, for which an Escrow Agent acts as the safe-keeper.
4. Pay the policy premiums during the life expectancy period
To maintain a policy, the premiums must be paid in a timely fashion. An Escrow Agent performs the task of ensuring all required payments are made from the premium reserve so that the
policy is not allowed to lapse. Mosaic is responsible for funding the Premium Reserve Escrow Account to cover premium payments for the PET period. If the Premium Reserve Escrow Account is depleted after the PET period has
expired, it then becomes the
responsibility of the client to replenish the Premium Reserve Escrow Account for their pro rata share of policy premiums on an annual basis, in accordance with the terms of the purchase agreement. Mosaic now offers the Cascade Green Portfolio™ product, which incorporates a premium reserve structure designed to grow the initial premium reserve funding in such a way as to reduce longevity risk and minimize (or, in some cases, eliminate) the need for premium reserve replenishment by the client beyond the PET period.
5. Collect and distribute the death benefit claim
At maturity, an Escrow Agent, as the beneficiary of record with the insurance company, collects the net proceeds for distribution to the purchaser of the beneficial interests on a pro rata basis. If proceeds are to be re-invested, the Escrow Agent will safeguard the funds until suitable Life Settlements are identified, then transfer the funds to the Purchase Deposit Escrow Account to complete the purchase.
Escrow Agent
Life Settlements as an asset class are characterised by an inherently safe pay-out mechanism, in that, the payment of the policy benefit upon maturity is guaranteed by the insurance carrier. Likewise, Mosaic has adopted policy administration and servicing procedures designed to
protect and safeguard the
investment, while keeping the client apprised of activity and performance for the duration of the portfolio. Among these protections and safeguards is the use of third-party escrow agents to handle client funds and premium reserves.
The Escrow Agent performs several important duties:
1. Receive client monies into escrow
An Escrow Agent receives and disburses client purchase deposits according to the terms of the purchase agreement between the client and Mosaic. By using an independent Escrow Agent, client monies are only disbursed as directed in the purchase agreements. The Escrow Agent releases funds to acquire the policy interest from Mosaic, to pay fees and commission on the purchase, and to fund Mosaic’s obligation to pay premiums for the duration of the policy PET period.
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Example of Life Settlement Documentation:
Certificate of Purchase
Certificate of Purchase
This is to certify that
[MOSAIC Client] Account # [TC003xxx]
has purchased the following Life Settlement Interest(s)
from Mosaic Alternative Assets, Ltd., with the following distribution of funds: Policy
Position Date Placed Policy Code Life Expectancy 1
Purchase Amount Value at Maturity 1 10-Jan-14 WR 0817262 AVS, 4-Dec-13, 60 months $ 15,000.00 $ 21,952.50 2 Total Purchase $ 15,000.00 $ 21,952.50
Details for this purchase can be found in the related closing documents. Quarterly Statements of your Life Settlement Interests will be provided, reflecting all purchase activity and the current balance in the Escrow Account.
On behalf of Mosaic Alternative Assets, Ltd. we sincerely appreciate your business. Sincerely,
_____________________________________ _____________________
Name: Date
Director, Mosaic Alternative Assets, Ltd.
_____________________________________ _____________________
Notary: Date
Mosaic Alternative Assets, Ltd. Apartado Postal 187-1230 Centro Comercial Plaza Mayor
San Jose, Costa Rica
Life Settlement Purchase Certificate:
16
Example of Life Settlement Documentation:
Life Settlement Summary
Apartado Postal 187-1230 • Centro Comercial Plaza Mayor • San José, Costa Rica PHONE +(011) 506.2201.5332 • FAX +(011) 506.2201.5331
http://www.mosaicalternativeassets.com
6/30/2015 12:10 PM
Asset Disclosure Exhibit
INSURED INFORMATION
Policy Code AB 1234
Age - Gender 85 - Male
Diagnosis (435.9) Transient Ischemic Attack/Mild stroke (305.0) Alcohol misuse, stated or inferred (185) Prostate Cancer Stage II
Projected Life Expectancy 67
Date of Life Expectancy January 9, 2015
Source of life expectancy 21st Services
INSURANCE COMPANY INFORMATION
Insurance Carrier William Penn Life Insurance Company of New York
A.M. Best Rating A++
Policy Number 0700024943
Death Benefit $2,000,000.00
Policy Issue Date December 7, 2003
Policy Type Universal Life
SUMMARY OF MEDICAL HISTORY
Subject is an 85-year-old Caucasian male with multiple diagnoses including stage II Prostate Cancer retreated in 2014. Also Stage I Bladder Cancer (2011) and stage I Colorectal Cancer (1997). Insured treated for Transient Ischemic Attack and/or mild stroke with full recovery. Misuse of alcohol also found in medical records from 2015.
INVESTMENT INFORMATION
Available Death Benefit Amount $ 2,000,000.00
Acquisition Amount $ 1,270,419.00
Gain in US Dollars $ 729,581.00
Projected Return 57.43%
Premium Escrowed Through August 8, 2021
Simple return per year for maximum projected LE 10.29%
Version I
Asset Disclosure Exhibit:
17
Example of Life Settlement Documentation:
Full Life Expectancy Estimates (redacted)
Life Expectancy Estimate:
18
January 20, 2014 Policy Death Benefit: $1,000,000.00
Policy Issue Date: 16-Jul-02 Life Expectancy 1 - (04-Dec-2013): American Viatical Services - 60 mos AM Best rating: Life Expectancy 2 - (11-Dec-2013): 21st Services - 50 mos
Premium Escrowed Through (PET): June 2018 Months remaining to PET: 54 months
as of Months 6 12 18 24 30 Policy Code: 87.39 years Age of Insured: Gender of Insured: 92.70% 46.35% Simple Annualized Return 30.90% 23.18% 18.54%
West Coast Life Insurance Company
Blended LE:
Return Sensitivity Analysis
20-Jan-14 WR0817262 A+ Male Insurance carrier: 40% 50% 60% 70% 80% 90% 100% n n u al iz e d R e tu rn
Impact of Longevity Chart
36 42 48 54 60 72 84 96 108
Confidential Information Not for public disclosure
The graph and table which appear on this page depict impact of the longevity of the insured on the estimated annual return for this life settlement policy. Neither is intended to provide a forecast of actual returns, but instead provide a visual display of potential returns over time as the insured approaches the estimated life expectancy(ies) and beyond. The information contained on this page is for illustrative purposes only and the actual return on the purchase of an interest in the policy identified above may vary substantially.
The graph and table above display a forecast of possible outcomes and do not contain actual data. The forecast is based on several assumptions, which may affect the actual performance of the policy. These assumptions are, as follows:
1. Potential annual return is calculated based on a specific acquisition date of the policy at a certain price. If the acquisition date or the price of the policy varies, the graph and the annual return table will change accordingly.
The proper use of the information contained herein requires a thorough reading and understanding of all documents provided to the purchaser at or prior to the time of purchase.
11.59% 10.30% 8.78%
2. The premium illustration used in calculating potential annual return for the time periods shown, which was provided by the insurance carrier at the time of the policy's purchase, is based on several underlying assumptions of the insurance carrier regarding future occurrences, such as the policy account value, cost of insurance, minimum premiums to keep the policy in force, etc. In actuality, these assumptions are likely to change over time, resulting in premium fluctuations that would affect the actual rate of return.
15.45% 2.85% 1.52%
Mosaic Alternative Assets, Ltd.
6.38% 4.46% 13.24% 0% 10% 20% 30% 40% 6 12 18 24 30 36 42 48 54 60 72 84 96 108 Si m p le A n
Months of Longevity Annual
Example of Life Settlement Documentation:
Return Sensitivity Analysis
Return Sensitivity Analysis: the Policy’s
estimated returns over different longevities
Purchase Process
1. The client reads and fully
understands the Confidential Product Disclosure Statement, including all exhibits and attachments, which provides a detailed statement of risks to consider prior to purchase. 2. Following review of all product disclosure documents, the client decides whether to participate in the product offering. If the clients chooses to proceed with the purchase, the client completes the:
a) Purchase Application, which includes the Confidential Suitability Questionnaire, the Subscription Agreement, and the Beneficial Interest Purchase Agreement; b) Investment Plan, which outlines the client’s overall investment objectives using Life Settlements;
and
c) Sources of Funds information. 3. The client submits the completed purchase documents to Mosaic and makes arrangements to pay the
Client
Maintenance:
Mosaic provides the following for each policy interest included in the client’s Cascade Portfolio™: 1. Asset Disclosure, Return Sensitivity Analysis and cash flow projections.
2. Regular statements of the portfolio and escrow accounts. 3. Ongoing updates on the health and status of the insured life. 4. Annual Verification of Coverage from the relevant insurance carrier (upon request).
5. Notifications of premium obligations if required beyond the PET period.
6. At each maturity, suitable new policies for consideration. 7. Updates on relevant developments in the Life Settlements asset class (at Mosaic’s sole discretion). purchase price into the Purchase
Deposit Escrow Account. 4. At closing, Mosaic issues:
a) the Client Welcome Letter, confirming receipt of the purchase funds;
b) confirmation of purchases and position-specific documents; and c) confirmation of coverage documents.
5. Purchase proceeds are disbursed from escrow according to the “Use of Proceeds” statement set forth in the product disclosure statement, which includes funding of the Premium Reserve Escrow Account.
Thank you for your considering Mosaic.
Please contact your financial advisor
to discuss how Life Settlements can
contribute to your overall
personal and financial goals.
Cascade Portfolio, Cascade Green and Cascade Green Portfolio are registered trademarks of Mosaic Alternative Assets Ltd.
This brochure was produced in July 2015 by Mosaic Alternative Assets Ltd., which asserts a copyright over all materials contained herein. It is provided for the personal use of Mosaic’s intended recipients. No part of this brochure may be copied, loaned, used or otherwise disclosed without the prior written consent of Mosaic Alternative Assets Ltd.
© July 2015 – Mosaic Alternative Assets Ltd.
Now is the time to
Mosaic Alternative Assets Ltd.
Apartado Postal 187-1230 Centro Comercial Plaza Mayor
San Jose, Costa Rica Telephone: +1 (866) 724-2476
Fax: +1 (561) 431-6280 www.MosaicAlternativeAssets.com
