Sell your Life Insurance Policy

What is a Life Settlement Policy?

It is a life insurance policy sold at a discount by a policyholder in order to unlock the benefits in their lifetime. It’s this discount that provides the investor with a return – the new owner receives the full benefits of the policy on the death of the original policyholder. One of the chief attractions of Life Settlements is that they provide a guaranteed payout, as policies are not linked to any form of investment performance.

The History

The Facts

The past 10 years has witnessed rapid growth in the traded policy market, as excellent returns and low risks see more and more investors turning to a portfolio of traded policies as a safe haven for their investment funds. Life policies have been traded in the United States, where they are known as 'viaticals' or 'life settlements,' for over a decade.

A review of the report produced by Professor Merlin Stone in October 2007, shows that in 1990 around $50m worth of policies were traded, according to Bernstein Research. In 2006 it was estimated by Credit Suisse that the market had grown to $20bn. The potential capacity of the Life Settlement market is even greater with Credit Suisse estimating that $23trln worth of death benefit existed in the US in 2006, making it the largest life insurance market in the world.