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Put Option (LIPPO®)
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'Innovation is the specific instrument of entrepreneur-ship... the act that endows resources with a new capacity to create wealth.' (Drucker)
Life Insurance Policy Put Option (LIPPO®)
What is a LIPPO®?
A LIPPO® gives the purchaser of the option the right but not the obligation to sell the beneficial rights to a life insurance policy at a pre-determined price and point in the future (anywhere between 2 to 5 years).

Why should premium finance companies purchase a LIPPO®
  • Those taking the underlying life insurance policy as partial security for the loan can also make use of the LIPPO® to hedge their position in the event of borrower default. (It should be noted that a LIPPO® may not be used for non-recourse premium finance programmes and all Premium Finance programmes are subject to approval by Cambridge Guarantee Ltd.)

The best of both worlds!
Although the Premium Finance company (the optionee) has the ability to sell the policy to us at a guaranteed price, there is no obligation to do so – the only obligation is on us. The optionee may retain the policy or alternatively try to obtain a better price in the open market-place; the decision is entirely at the optionee’s discretion.

Legal and Financial
The legal and regulatory compliance of the LIPPO® programme and its financial strength have been independently signed off by Clifford Chance US LLP and Lewis & Ellis respectively.

Legal Information