What are some tips I should know about on investing in promissory notes?

The elderly with high returns with minimal investments are often targeted by promissory note scams. In addition to policies, there are some life insurance agents that sell promissory notes. If you're thinking about an investment in promissory notes, the North American Securities Administrators Association (NASAA) and New York Department of Insurance offer some tips to protect you and your money.

In order to confirm that the notes are properly registered or legally exempt from registration, confirm them with your state securities regulator before investing in any promissory note.

Keep in mind that you should hold on to your money if you can't verify that the notes are registered or exempt. You might want to check the legitimacy of the company who are offering these notes, too.

Any investment "guaranteed' by a bond from an offshore bonding company should be thoroughly investigated, suggests Florida securities regulator, Laura Royal. If the bonding company is registered to do business in the United States, your state insurance department can verify that.

• It isn't recommended for you to put all of your savings into one account.

• Don't be pressured by companies who are pushing you to immediately make your investment decision.

• You should be aware of offshore insurance companies offering you "guaranteed' investments.

• You should be careful of agreeing to any investments that are sold as "guaranteed' or "no-risk' and are advertised with a high rate of return.

• If the notes have an above-market rate with a maturity of less than a year, you should be suspicious.

• Make sure that the agents that are selling these "notes' are licensed by both the state and the National Association of Securities Dealers (NASD). You can find out if your agent is registered or has a disciplinary history.

You will be able to find out by contacting your state securities regulator. You can also contact the NASD Public Disclosure Hotline at (800) 289-9999