A life expectancy is a critical piece of information in the life settlement process. It is produced by a life expectancy provider (LEP). The LEP underwriter reviews the insureds medical records. They add up all the negative findings, subtract all the positive findings and what they are left with is the life expectancy rate for that insured. They then apply this rate to a variety of actuarial tables to ultimately determine what they is the LE for what particular individual.
It is not an exact science as the insureds medical records are subject the interpretation of the individual underwriter at each LEP. Also each LEP may apply their credits and debits differently and they may also use different actuarial tables. That is why a LE report will vary between different LEP’s
The LE allows a settlement broker or provider to first prescreen a case to see if it fits a providers initial criteria. Then assuming the case passes the prescreening process the LE is used by the provider to determine what offer they will make on the case. A lower LE will mean a provider can make a higher offer insured and vis-à-vis.
To learn more about life expectancies and why they’re important to a life settlement provider click on the LIVEpdq link now.