Life Settlement Investment

Life Settlement investment opportunities are growing. New options in this asset class are announced often.

Basic Information

What is Life Settlement investment?
Life insurance policies sold by the original owners for a percentage of the death benefit. Investment can be in individual policies, but more often takes the form of shares in a pool or portfolio of policies.

Options for Small Investors

Buying individual policies for Life Settlement investment. Probably not a good idea unless you are very familiar with the circumstances of the insured, their life expectancy and have the beneficiaries sign a release. There are many more risks for the investor purchasing policies for his own portfolio.

Stocks. Most of the companies involved in the viatical and life settlement industry are privately owned or are part of larger companies. At this time there are only a couple of companies publicly traded.

Life Partners Holdings, Inc. is traded on the NASDAQ exchange.

Life Exchange is an over the counter stock(OTCBB:LFXG). The company operates an electronic exchange for the life insurance secondary market. In a May 18, 2009 press release on Business Wire David C. Dorr, President & CEO, Life-Exchange, Inc. commented about the Life Settlement Market. "We are pleased to see the stabilization and resilience of the life settlement market and signs that its growth trajectory is moving back towards its previous path in 2007. Life-Exchange continues to grow with the market and we see more industry participants opting for the benefits of transacting life settlements on an electronic platform. We believe that within the next five years better than 80% of all life settlement transactions will be conducted electronically."

For institutions or the very wealthy.

Life Settlement investment for accredited investors and institutions:

• Minimums start at $50,000 US
• Shares of a diversified portfolio or fund.
• Returns based on the death benefits of life insurance policies.
• Fees will vary depending on the size of investment. I have seen fees ranging from one quarter to one half percent.
• Risk is thought to be minimal, based on the strength of the companies issuing the policies which are in turn backed up by industry and government regulations and guarantees.
• Often requires two years or more before any returns are paid.

Resources for Investors

For more information on investing in a Life Settlement Portfolio visit the Mosaic Group website. Speaking to one of their people gave me a much better understanding of this topic. As always, consult a qualified financial adviser and do your own due diligence before investing.

The AAP Life Settlement Index provides a measure for investors to gauge the performance of their portfolio.

If you are thinking about investing in life settlements this pdf at AM Best will give you an idea of how truly complicated the topic can be.

Outstanding information on Life Settlement Hedge Funds. Start with this article then search the blog using appropriate key words. I believe you will find this to be a valued resource.

Essential reading for those who desire to understand the risks associated with life settlement investment. "Life Settlement Mortality Considerations and Their Effect on Portfolio Valuation," by Ed Mohoric, FSA, MAAA of MILLIMAN USA and Robert O. Kinney, M.D., FLMI of PHOENIX LIFE SOLUTIONS. March 1, 2008. This study details how improved health and longevity of seniors may adversely affect portfolio values.

LSIQ offers information and training for investors. Their site approach is unusual as compared to most others in the industry. It provides quality content instead of sales pitches and come ons. As always, I can make no recommendations about their abilities as advisors, but their site is worth the visit.

The 2008 VBT report has been released. The new table will likely affect the value of existing life settlement contracts and future appraisals of life insurance policies being considered for life settlements.

The new Goldman Sachs QxX mortality index for life settlements offers information concerning a pool of 46,000 lives age 65 and up. This article in Investment News gives a description of the index. For more detailed information go to the QxX home page.

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