Funding life settlements usually are done by large corporations with portfolios of insurance policies. Many people with insurance policies that can’t afford the policy have an option of selling their insurable interest to either an individual or a corporation.
Investors that purchase life settlements are usually large companies with huge blocks of insurance policies that resemble stock portfolios. Funding life settlements is solely based on the life expectancies of the policy holders. The policies start to resemble stock portfolios because of the diversification of the polices. There are some low risk medium risk and long term more speculative risk policies that make up the different policies.
There is always risk associated with any investment the interesting thing about life settlements is that it’s not a matter of if the insured will die but when. So the life expectancies for funding life settlements.
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