This is great news for the Life Settlement Industry, with tighter lending and credit markets many were waiting to see how funds would react continue to purchase and invest in life insurance settlements.

As the stock market continues its tumultuous run, interest in life insurance settlements as an institutional investment is at an all-time high according to executives at The Lifeline Program®. A number of factors are contributing to this increase, but the investment category’s status as an asset non-correlated to the stock market is proving to be attractive to institutions.

According to W. Scott Page, life settlements are gaining momentum for the following reasons:

Non-correlated assets can generate an attractive yield. The markets have little effect on life settlement yields. One of the key aspects of a life settlement is that the investor earns a payout on the demise of the policyholder. The strength or weakness of the stock market does not impact the life settlement arena.

Life settlement assets are backed by highly rated financial institutions. Life settlements are performed on policies held by carriers with A.M. Best ratings of “A” or better, so the payouts are regulated and solid.

Trading platforms exist. Several “household name” institutions have developed or are developing platforms to trade life settlement policies and portfolios.

Securitization is on the horizon. Though it may not be this year, securitization is definitely in the future for life settlements. Portfolio analysis comprising the past several years proves that life settlement portfolios will perform predictably and generate consistent cash flow.

Third party tracking, servicing and underwriting simplify the investment. In a sign of a maturing industry, life settlements are not necessarily managed by one-stop shops anymore. The size and scope has made it profitable for third party companies to manage tracking, servicing and some underwriting, thus easing entry by financial players.

We will continue to monitor as more and more available purchasing entities enter the Life Settlement Arena.

Keep checking back for more Life Settlement Info!

Source: eMediaWire