Altium Structured Settlement Investments (SSI s)

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1 What is an Altium Structured Settlement Investment or SSI? Altium SSI s are streams of court ordered cash payments, paid by an Insurance Carrier, the payer, to a plaintiff who won a personal injury lawsuit. The original plaintiff then sells these scheduled payments for a lump sum to a purchaser. By court order, the payer must reassign the stream of payments to the new purchaser. What are the benefits of purchasing Altium SSI s? Altium SSI s can provide significant returns for the fixed income portion of a balanced portfolio. They guarantee a payment stream over a fixed period of time, at a fixed rate of return, and are backed by Insurance Companies with among the highest credit ratings in the industry. This combination of high yield and solid safety makes them one of the most attractive forms of fixed term purchases available today. Where do Altium SSI s originate? Individuals involved in legal claims for personal injury often accept a structured settlement award in which they receive specified payments over a set period of years. As circumstances change, these individuals sell their rights to the future payments at a discount to a factoring company. in turn, offers the payment rights to these court ordered guaranteed payments, called Structured Settlement Investments or SSI s, to purchasers who then receive the payment streams. Altium SSI payments are made regardless of whether or not the existing original plaintiff or new purchaser is alive, meaning these payments are not contingent on any individual s life. What is the typical Altium SSI term and purchase amount? The purchase price of Altium SSI s can range from as low as $15,000 to as high as in the millions. Terms can range from 1 to 35 years and cash-flow can take the form of annual payments, monthly payments, quarterly payments and/or 1 lump sum.

2 How is the rate of return determined? The yield or rates for SSI s are determined by the current market at the time of purchase. Other factors such as what the buyer is prepared to accept as a return on his or her purchase of an SSI, as well as the duration of the payout are considered. The Insurance Company s financial rating also plays a key role in determining the yield to the purchaser. Do I have to appear in court for payments to be transferred to me by court order? No. and the utilized factoring companies have expertise in legally transferring payment rights. We will arrange a court order in your name at no additional cost to you. All of the court costs, transfers, fees, lien search fees, and legal costs are paid by us. What is the legal structure of the purchase? and our utilizing factoring companies acquire the payment rights to Altium SSI s from an existing awarded plaintiff and transfers the payment rights to you, the buyer through a court ordered transfer process. Your name and assignee information will be stated in the executed court order, which is generally obtained in the state where the existing plaintiff resides. The court will direct the Insurance Company who issued the fixed term payment stream to pay you all of the cash payments you are acquiring when they are due. Payments are made whether the existing original plaintiff or the buyer lives or dies during the period that the payments are due. Upon the death of the buyer, the payments continue to the joint owner (s) or other owner (s) or the estate of the buyer, as designated. Payments are typically made by a check mailed to your designated address or by direct deposit into your bank account. You may usually select your preferred method of payment. As the buyer, you may change the address for payment or bank account information designation at any time by informing the Insurance Company directly. What documentation will I receive after closing? Shortly after the closing of the transaction, will provide to the investor a closing binder. This binder will contain all the documents related to the transaction including but not limited to the purchase agreement, legal due diligence files, lien searches, original settlement terms, executed court order as well as the

3 assignment agreement which contains the details of the transaction and payments being reassigned. What are the risks? Like other financial products, Altium SSI s are not risk-free. As a buyer, you must determine whether Altium In-Force Cash Flows meet your risk tolerance and purchase objectives, and are suitable investments for you. You must fully understand what you are purchasing, and take the time to learn about SSI s and their features, benefits and risks, and conduct your own due diligence. In addition, Altium does not provide any any legal, accounting, financial or other advice or guidance of any kind to the buyer of an SSI, and does not give any opinion on the creditworthiness of any Insurance Carrier or obligor of the SSI payments. The following are risks associated with Altium SSI s: How do I become a buyer? The security of an SSI is directly related to the financial health of the Insurance Company ordered to make the payments and its ability to pay claims as well as the terms of the court order that accompanies each transaction. SSI s are not deposits and are not insured by the Federal Deposit Insurance Corporation (FDIC) or any other federal government agency. They may be partially guaranteed by State Guaranty Associations but makes no representations or warranties in this regard. SSI s are subject to interest rate risk. Market interest rates may rise or fall while the rates of return on SSI s are locked in. Fixed income purchases with longer terms to maturity are usually more sensitive to changes in interest rates. One method of hedging interest rate risk during a volatile rate period is to build an In-Force Cash Flow ladder by buying a series of SSI s over an extended period of time, thereby averaging the rates of return. SSI s are monetized in U.S. Dollars. Foreign buyers may be subject to currency exchange risk. SSI s typically must be held to term and therefore are not liquid purchases. To become a buyer, you must: Provide all relevant information that is required for the court reassignment. This includes but is not limited to: Name, Address, Phone Number, Date of Birth, Social Security or Tax ID Number

4 Provide a $5,000 deposit at the time the existing original plaintiff executes a sale and assignment agreement with. Pay the balance of the purchase price upon court transfer order naming you, the buyer, as the new payee. Can buyers sell their Altium SSI s? Once you purchase an Altium SSI, it generally must be held to the completion of its term. Altium SSI s are generally not liquid or marketable. The transfer court order could state that there are no future reassignment rights permitted. What are the income tax considerations for me as a buyer? expresses no opinion on buyers tax obligations and recommends that you consult your tax advisor accordingly. In addition, Altium does not provide any any legal, accounting, financial or other advice or guidance of any kind to the buyer of an SSI, and does not give any opinion on the creditworthiness of any Insurance Carrier or obligor of the SSI payments. Who supplies the guarantee? The Guarantee of the SSI comes directly from Insurance Companies with AM Best credit ratings. Can I buy this in an IRA, ROTH IRA? Yes, Altium SSI s are eligible for self-directed IRA s and self-directed Roth IRA s. Can I buy this in my 401K? Yes. Altium SSI s are eligible for a 401k as long as the employers plan includes a self directed platform option. Can I buy this in a joint account with a co-investor? Yes. SSI s can be purchased as a joint account if the co-investor is above the legal age of 18 I have a small business; can I purchase this in my Profit Sharing Plan? Yes, SSI s can be purchased in a profit sharing plan as long as the plan is trustee directed.

5 Can I do a 1035 tax free exchange from my deferred annuities, my fixed annuities or my life insurance? No. SSI s are not eligible for a 1035 tax free exchange What happens to my money when I die? Altium SSI s are guaranteed to pay for the life of the policy. If the beneficiary of the policy dies, payments will continue to the estate. Why am I getting such a good rate of return? Altium SSI s offer exceptional yield because they are purchased and reassigned at significant discounts (remember, the original plaintiff chooses to sell their stream of payments at a discount for a lump sum payment).