Senior Life Settlements

What are Senior Life Settlements?

Senior Life Settlements are a financial vehicle involving the discounted purchase of the death benefits of an existing life insurance policy of senior citizens of 60 years of age or elder who has an independently determined limited life expectancy by an actuarial service provider. The purchaser becomes the irrevocable beneficiary of chosen policies that pay face value at maturity date. 

They are basically the purchase of property and the purchase is arranged in the same manner as most real estate transactions, through a closing by an escrow agent, attorney and a title company. The Life Settlement provider functions much like that of a Realtor working on behalf of investors. We find policies that meet our client's specifications, arrange for the policies to be thoroughly evaluated by a number of licensed service providers; and once the policies have been thoroughly evaluated, handle all the purchase transactions for the benefit of the Purchaser. Purchase fund escrow services, premium management and closing services are provided by independent escrow and closing agents.

Single Life Settlements are purchased at a known discount price. Both the purchase price and total return at maturity are known in advance and to the penny. As such, the return on investment (not to be confused with the annualised return) is fixed and is immune to the volatility of bond markets as well as interest rate fluctuations and other economic exigencies. Their safety is considered exemplary as the financial status of top-rated insurance carriers is established by trusted companies such as Standard & Poor's and Moody's.

Historically, the main unknown variable was the actual date of maturity, which is the time of payment of death benefits by the insurance carrier. Therefore, while the return on investment (ROI) was predetermined, there could be no specifically warranted annualised returns. This obstacle can now be overcome by requesting that purchase funds be utilised to purchase bonded policies.

The US market in SLS-Policies has been valued at in excess of US$6 billion and is growing rapidly. Refering to a study of CONNING & CO, an Analysis Institute of the Life Insurance Industry in the USA, the SLS-POLICIES volume that could be dealed with is estimated at US$130 billion, so that can be estimated that there will be growth in the future market as well.