VIATICAL & LIFE SETTLEMENTS CONSUMER INFO

for Prudent Sellers and Investors

We do not buy
or sell
viatical or life settlement contracts

To Order Books
Click links
at the bottom
of the page





(not the actual cover)

Wrong  Information from MBC Receiver

These questions and answers were published on the Web site of the receiver for Mutual Benefits Corp. Below each, in yellow, are our answers based to the same questions.

Frequently Asked Questions

Q.          Why can’t I get current medical records for the insured? Will there be medical updates in the future?

A.  The Receiver does not have current medical records and has no plans to obtain updated medical records. Based on past history, the cost of obtaining medical records is approximately $300 per insured each time records are requested, not including the cost of labor spent on this effort. With over 7,000 insureds, the costs of obtaining such medical records would be in excess of $2,000,000. This is an amount that the Receivership cannot afford. In addition, the medical records are confidential health information for the insureds that is protected by federal privacy statutes and regulations. Moreover, most of the insureds are not required to provide medical records and, based on past experience, are generally reluctant to do so. Based on past experience, despite whatever effort and monies are expended, Mutual Benefits Corporation is unlikely to receive updated medicals for 60% or more of the insureds.

OUR ANSWER:

The truth is that the receivership cannot afford to spend $2 million to provide full disclosure and information to enable investors to make an informed decision because the receiver and his cronies have been "milking" the assets of the receivership for their own benefit. For example, within the first few months of the receivership, the total paid for various services exceeded $2 million. In July 2004 alone

This is "par for the course." This receivership is not unique. The huge expenses paid out long before any investors are paid will continue until there is nothing left with which to pay the various entities employed by the receivership.

Additionally, it is possible that the receiver is confusing medical updates--current status from doctors--with life expectancy estimates. Updates from doctors are not likely to cost more than $25 per insured. The charge of $300 would not be incurred unless the receiver requested new life expectancy estimates from companies that specialize in providing these services to the viatical & life settlement industry. If he actually explored providing updated life expectancy for 7,000 viators, it's likely the companies would compete for this business and provide huge discounts.

Q.          Why doesn’t the Receiver continue to pay premiums until maturity for all policies kept by the investors? 

A.  It is unknown when the maturities would occur. There is simply not enough money in the Receivership to do so.

OUR ANSWER:

There is not enough money because the receivership has paid out millions to the receiver's law firm and everyone employed by the receivership. The law profession's dirty little secret is that a receivership is "a cash cow" for lawyers and their friends. Similar to class action lawsuits, the injured public does not get as great a benefit as do lawyers. It doesn't have to be that way. For details, see Viatical & Life Settlements: An Investor's Guide. 

Q.          How much cash value is in the policy?

A.  There is no final answer to this question. In many policies the cash value, if any, has been used to pay for premiums, so the number is constantly fluctuating.

OUR ANSWER:

Using the cash value to pay premiums may be the stupidest thing this receiver has done. Every dollar of cash value used to pay premiums reduces the death benefit.

Additionally, not all policies have cash value. Term insurance never has cash value. Unfortunately, investors were not given this information when they were asked to vote on the future of their investment.

Inquiring minds wish to know: Did the receiver get court permission to use cash values to pay premiums? If yes, under what conditions was this done? What criteria were used to decide when this would occur, and for which policies? Were the affected investors notified?

Book mark this page: MORE TO COME.