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.
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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.
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