The insurance investment company Life Partners, Inc. and its parent company, Life Partners Holdings, are facing a lawsuit filed by the Texas state attorney general alleging that the company misled investors and violated state securities laws. Attorney General Greg Abbott says that Life Partners deceived investors by falsely claiming that investments with the company would pay off sooner than the actual date. Life Partners sells a type of insurance investment known as a life settlement. These investments consist of life insurance policies which are purchased from the original policy holder and re-sold to investors at less than the full policy amount. When the original purchaser of the policy dies, the investor receives the full amount of the policy. The value of each life settlement policy depends in part on the life expectancy of the original purchaser. The shorter the policyholder is expected to live, the sooner the policy would be expected to pay out, and, thus, the more it would be worth.
In the Texas lawsuit against Life Partners, Attorney General Abbott accused the companies of selling life settlement policies to investors with fraudulent life expectancy calculations. As a result, investors purchased life settlements for much more than what the policies were actually worth. Abbott has charged that more than 80% of the life settlements sold by Life Partners contained fraudulent life expectancy dates. Abbott has compared the tactics employed by Life Partners to those of used car salesmen who roll back the mileage on the odometer. According to the lawsuit filed by the State of Texas:
The companies rely upon one life expectancy at purchase and then provide investors with a significantly shorter and artificial life expectancy in order to generate contrived and inflated revenues.
The law firm of Heygood, Orr & Pearson has filed two class action lawsuits against Life Partners on behalf of investors who were misled by the company about the value of their investments. Individuals who bought life settlements from Life Partners may still be able to file a lawsuit against the company. For a free legal consultation, contact the lawyers at Heygood, Orr & Pearson by calling toll-free at 1-877-446-9001, or by filling out our free case evaluation form located on this website.