How is the OFG Trust managed? Is my investment safe?

With an investment in the OFG Trust, any risk of fraud by a misappropriation of funds has been eliminated by using a bonded escrow agent. When an investor decides to make an investment, their money is deposited into an escrow account in which the escrow agent has sole signatory rights. The funds in the escrow account are ultimately used to purchase the life insurance policies from the senior individuals.

Once a policy has been purchased, the OFG Trust is made the new owner and beneficiary of the policy. When the change of ownership and beneficiary has been officially recorded and recognized by the life insurance company, The Oxford Financial Group then makes the policy available to investors. As money is invested, the OFG Trust will issue beneficiary designations on the policy. When the policy matures, the life insurance company pays the OFG Trust (beneficiary of the policy) the full-face amount. The Trust then pays each investor the amount of their designation for that policy.

Another major factor The Oxford Financial Group considers is the strength of the underwriting life insurance companies and any possible loopholes that could affect the full payout of a policy. All policies involved in the OFG Trust must be issued from A-rated or better insurance companies, as rated by Standard & Poors. Life insurance policies will typically be issued by well-known and reputable companies, such as John Hancock, MetLife and Equitable, etc. Because of this, investors can feel confident that the source of their payout is backed by the largest and most stable insurance companies in the world.

Other possible factors that could affect the payout of the policy involve the contestability of the policy and the legal rights the previous owner or beneficiary(s) may have to the policy benefit. The OFG Trust consists only of policies that are beyond any contestable or suicide clause period. For most all policies, this period is two years from the date of issue. Contestability issues, for example, would be if an insured individual did not fully disclose his/her past medical history and died from a related ailment or if he or she committed suicide. As long as the death occurs after the contestable period is over, the life insurance company must legally pay the full-face amount of the policy to the OFG Trust.

Another critical issue that is considered for the life settlement purchase is any legal recourse the previous owner and beneficiary(s) may have to the policy benefits. This situation is addressed by requiring two documents before a life insurance policy is purchased from a senior. First, the owner of the policy must supply a statement from his/her physician that he or she is of sound mental capacity and able to enter into a contract. Secondly, the beneficiaries also must sign a statement that they are aware the sale of the policy will rescind any future rights they may have to the policy benefits. The insurance policy is only purchased for the OFG Trust after both signed statements have been received.