Life Settlements Defined
Life Settlement
Instead of selling the policy back to the issuing insurance company
at less than market value, or allowing the policy to lapse and
forfeiting the value, life settlements allow another exit option
that can quickly maximize the cash value for the policy owner, and
in many cases producing purchase prices well in excess of current
cash surrender values. The average policy purchased today is in the
range of $1 to $2 million dollars in policy death benefits.
Life settlements (also known as "senior life settlements" or
"high-net-worth transactions") differ greatly from viaticals.
In the case of life settlements, the seller is generally not dying
of an imminently terminal illness, but may have some health
impairments that could contribute to a shorter life expectancy.
The average seller is approximately 78 to 80 years old, has a life
expectancy of four to five years, and no longer wants or needs their
life insurance policy because of a changing financial situation.
Origin of the investment
The viatical industry was first conceived in Europe in the 1880s.
The United States, however, did not venture into viaticals until
1989 with the onset of HIV. Individuals who had the virus
often found themselves in financial straits, with expensive costs of
medication and treatment. This led to resourceful individuals
finding that they had an extremely valuable asset – a life insurance
policy with a death benefit that could possibly be realized in a
very short amount of time.
Investors helped those in need by providing them with the capital
necessary to pay for medical treatments to help prolong their life,
while at the same time making a sizeable return on their investment.
Since then, this investment has matured into a viable investment to
diversify any portfolio. Its relatively low risk, potentially
high yield return has offered many investors a great diversification
tool and the opportunity to "hedge" against the volatility of the
stock market..
This website is informational only, and is meant only to provide you with general information regarding life settlement investments. This website is not an offer to sell or a solicitation of an offer to buy life settlements. Life settlement interests may not be available in your state. The representations and opinion in this website are solely those of investingmakesmesick.com