Non-Correlated Investing - Life Settlements

A Life Settlement, also known as a Senior Settlement or Senior Life Settlement, is simply the sale of an existing life insurance policy by a senior adult to another party. The price of the policy is negotiated with the owner who receives a portion of the face value for the transfer of the policy. Once the life insurance policy has matured, the investor then collects the full amount paid out under the policy.

Life Settlements are similar to zero-coupon bonds. They are purchased at discounts to their face value which fall into general brackets according to the life expectancy of the owner or insured. These discounts will vary slightly based on individual policy features and market conditions.

Yield is computed from the difference between the cost basis (including and premiums paid) and the amount paid out under the policy upon the demise of the insured. An annualized return on investment may be derived from the yield by adjusting it for the holding period of the investment.

Life Settlements provide a valuable service for both the investor and the insured. To the investor, a Life Settlement is a long-term investment unaffected by market conditions, global economy or world events. To the insured the sale of their personal policy means a chance to receive money today for an asset they no longer need.

For more information and to determine if Life Settlements are suitable for your investment needs, call Tim Olk at (903) 509-0009 or click here to request more information.