The old saying “One man’s trash is another man’s treasure” is just a way of saying that two people can look at the same item and find different value in it. With the large number life settlement funders in the marketplace today, that is certainly true, and none of them will find the same value in a policy as the other.
Take for instance a recent life settlement case where a client had a $7,000,000 policy for sale. The same policy information, illustrations and life expectancies were submitted to over 15 life settlement funders. Many of them declined to offer stating the policy did not meet their parameters (which may be code for “we don’t have the money to buy it right now!”)
The first several offers from the life settlement funders were under $100,000, the next few were in the $300,000 range and the final offer was close to $600,000, which the client accepted. Of course there was a lot of work involved to get that specific offer, but it does illustrate the importance of a knowledgeable life settlement broker, but also the difference in the parameters of the money sources that purchase policies.
Life settlement funders often have a “traunch” that will allow funders to purchase policies as long as they fit the investment strategy set forth by the traunch managers. Once the traunch is full, it is closed and may even be sold to another group of investors, but the point is life settlement funders may have money one day, but none the next simply because the door closed on the money source.
The other key point is that an experienced life settlement broker knows which life settlement funders have funds available and will know to shop them with your case.
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