6 Predictions of Life Settlemen Secondary Market

Here 6 predictions of the grown life settlement market:

1.

Life settlements fund managers predict this sector will grow in volume to USD150bn or more in 4 to 8 years

therefore growing at about 20% to 30% per year. This is a huge swell in the life settlement industry.

2.

Managers of various life settlement investment funds , are predicting that the US traded life settlement market will grow in value to USD150bn by 2018 and other sources say that volume may be a reality in 4 to 5 years let’s say by 2012. The volume is being driven by the demand from institutional and individual accredited investors seeking stable returns in an unstable market.

3.

Firms, which have life settlement assets under management, expect very significant growth because other asset classes have become increasingly volatile. So registered investment advisers be on the look out.

4.

Since the market's emergence from the viatical industry of the 1990s, the life settlement industry has grown dramatically. With increasing nervousness surrounding traditional asset classes, tighter regulation and a more structured approach to investing, the life settlement product is of a much greater interest to pensions, institutional funds, bank investment funds, and high net worth accredited investors.

5.

To summarize a life settlement, it is a life insurance policy sold on the secondary market, where the insured party can expect to receive more than the surrender value of the insurance policy but less than the death benefit. The buyer acquires the beneficial interest in the policy and is now responsible for making the premium payments. The buyer or investor will receive the death benefit when the insured individual expires. Typically you can expect the returns to range between 8 and 12 per cent.

6.

The policies traded are generally those taken out by people who are retired. On the sale of the policy their life expectancy is assessed by a medical underwriter. Ascertaining the life expectancy of people aged 65 or more is challenging and special care is taken to evaluate the life expectancy and the latest Valuation Basic Mortality Table is used to estimate the life expectancy. The presence of a medical condition needs to be identified and the degree of severity compared with the base line levels in order to complete the analysis.