Penn Life Insurance

Life Partners (LPHI) Hits a Dead End

Life Partners’ business model, which oozes of bad karma, is a controversial one, and has attracted Texas regulators, who have sued the company for failing to comply with subpoenas in a death benefits investigation, in which unspecified “unscrupulous practices” and “unregistered investments” were being investigated. Current shareholders were shocked last week to hear of this investigation, which has been ongoing since mid-2010, for the first time. To make matters worse, the SEC has also announced a pending investigation into its top three officers and their knowledge of the “accuracy of life expectancies,” revenue recognition, impairment of life settlement investments and premium advance policies.

The company has also hurt its credibility by falling behind in its 10-K and 10-Q filings, and thus not produced an up-to-date earnings report. The company’s current financial health is anyone’s guess, and investors are reluctant to put money blindly into a company that has closed the curtain on its finances as it undergoes state and federal agency investigations. Another sign of trouble is accountancy firm Ernst & Young’s refusal to continue auditing for Life Partners due to the company’s overly aggressive revenue recognition. The resulting delinquency of its first quarter report has led to a warning of delisting from Nasdaq, which has given the company an August 1 deadline to submit its earnings or a plan to get back on track. If a proposed plan is accepted, Nasdaq can grant the company up to 180 calendar days to file proper earnings to avoid delisting. Life Partners announced that its new auditor, Whitley Penn, will complete the required 2011 financial statements and re-audit its fiscal 2009 and 2010 statements. A time-frame for completion was not specified, but the company is expected to comply with Nasdaq’s rules, as being delisted from the exchange would be a devastating blow to the company’s shares.

The only hint current investors have to gauge the company’s financial health is a statement issued last week, expecting $7.6 million in revenues, with a net income of $3.7 million. These numbers are lower than expected, which profits down $100,000 from the previous quarter, which Life Partners attributed to a decreased volume of deals in the insurance industry, the resignation of Ernst & Young in June, unfavorable media coverage regarding its business model, and bad publicity regarding a pending SEC investigation.

Colonial Penn Life Insurance?

Thank you for the information. I have diabetes and a lot of life insurance companies will not insure me, even though I take oral medication and not insulin dependent. That's why I was looking at Colonial Penn. I understand that it is a "guaranteed issue" which means, I assume, that you don't get full face value of the policy until after two years, unless accidental death occurs. Some Life Insurance companies offer policies where there are no med exams but you have to answer a few medical questions. I know Colonial has this type of policy, they describe it on their website. I'm not sure what questions C.P. asks, but I know that some companies will not exclude an oral diabetic. They only ask about insulin dependant diabetes. So assuming your answers to all of the other questions are favorable, you would qualify for this type of Whole Life where the full death benefit is available immediately as opposed to "guaranteed acceptance" where they ask no questions. The premiums would also be lower than "guaranteed acceptance". They are part of the clusterfuck, that is, Conseco and Bankers Life and Casualty Co. They suck. Plain and simple. You would be better off with another final expense life insurer. There are A rated carriers out there which have a better product and track record than Bolonial Penn ..... RUN FOR THE HILLS ! DO NOT BE SUCKED INTO THE SCAM ** ALEX TREBECK !

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