The Importance of Privacy & Confidentiality in the Life Settlement Industry

Privacy is a critical concern in the life settlement industry, where sensitive personal, medical, and financial information must be protected throughout the transaction process. Life settlements involve multiple stakeholders—including policyholders, insureds, licensed brokers and providers (buyers), medical underwriters and institutional funds—each with specific regulatory obligations. While absolute anonymity is not possible due to the nature of life insurance contract management, strict confidentiality measures are in place to ensure that personally identifiable information (PII) is safeguarded and disclosed only when legally necessary.

Understanding the Role of Key Stakeholders

In a life settlement, the licensed life settlement provider (commonly referred to as the "buyer") purchases a life insurance policy on behalf of a life settlement fund, which raises capital from institutional and high net worth accredited investors. Once a policy is sold to a licensed provider, a securities intermediary typically becomes the legal owner and beneficiary on the insurance carrier’s records on behalf of the fund. The fund and its servicing agent are responsible for tracking the insured’s status, maintaining the policy, paying premiums until maturity, obtaining the death certificate of the insured and filing the eventual death claim with the insurance carrier.

To fulfill these obligations, the fund’s management team must have access to the insured’s personal and medical information.

However, the end investors—whether institutional or high-net-worth accredited investors—do not receive any personally identifiable information. These investors receive monthly or quarterly fund performance reports and financial statements, similar to the reporting procedures of an ETF or mutual fund.

Because of these complexities, working with properly licensed firms is essential to ensure compliance with state-mandated privacy laws and industry best practices.

State Privacy Laws & Confidentiality

To protect insured individuals, most states have enacted life settlement regulations that impose strict privacy and confidentiality requirements. These laws dictate when and how an insured’s personal or medical information can be disclosed.

In general, disclosure is only permitted in the following circumstances:

• To underwrite and assess market value - The insured and policy seller must provide written consent before any personal or medical information is obtained and shared with licensed life settlement companies and underwriters.

• To finalize a life settlement contract – The insured and policy owner enter a contractual agreement to sell the policy to a licensed life settlement provider.

• To underwrite and assess market value - The insured and policy seller must provide written consent before any personal or medical information is obtained and shared with licensed life settlement companies and underwriters.

• To finalize a life settlement contract – The insured and policy owner enter a contractual agreement to sell the policy to a licensed life settlement provider.

• For regulatory investigations – If required by a state insurance commissioner or government agency, personal data may be disclosed as part of a compliance examination.

• For future policy transfers – If a life settlement provider transfers ownership of a policy to another licensed provider or fund, personal information may be shared as part of the transaction.

• For ongoing health status monitoring – A life settlement company or its authorized servicers may contact the insured periodically to track health status, a requirement necessary to manage the investment.

How Welcome Funds Prioritizes Privacy and Compliance

At Welcome Funds, we take privacy and regulatory compliance extremely seriously. Unlike some brokers who work with private investors or unlicensed providers, we exclusively partner with licensed, institutional buyers who are subject to strict state and federal oversight.

Our Commitment to Confidentiality

✅ No direct dealings with private investors – We do not work with individual investors or unlicensed providers who may lack the same regulatory safeguards. Our firm and its national accounts require strict confidentiality and compliance.

✅ HIPAA & State Law Compliance – We require written authorization from the insured before sharing medical information, ensuring compliance with HIPAA and all applicable state and federal regulations.

✅Secure Data Management – We use industry-leading platforms like PolicyTrac® to safeguard sensitive information, ensuring encrypted data transmission and restricted access to owner and insured PII​.

✅Regulatory Due Diligence – Our compliance team monitors state laws, provider licensing, and fund management practices to ensure every transaction meets legal and ethical standards​.

✅ Transparency & Consumer Protections – We provide state-mandated disclosures, allowing policyholders and insureds to make fully informed decisions while maintaining control over their personal data.

The Bottom Line: Choosing the Right Broker Matters

Because life settlements require ongoing policy tracking and compliance with state and federal regulations, complete anonymity from all stakeholders is impossible. However, proper licensing, strict confidentiality agreements, and regulatory oversight ensure that personal information is only disclosed when legally required.

By working with a licensed, experienced broker like Welcome Funds, policyholders and insureds can be confident that their privacy is protected and that their life insurance policy is sold through a fully compliant, transparent process that maximizes value.

If you are considering a life settlement, trust a broker that prioritizes your best interests and safeguards your privacy. Contact Welcome Funds at 877.227.4484 or visit www.welcomefunds.com to learn more.