Life settlement life expectancy is the most important aspect of the life settlement process. A life settlement is where the owner of a life insurance policy sells their insurable interest for the living benefit of the policy. Life settlements became popular during the mid 80′s during the AIDS epidemic. Investors wanted to purchase these polices because AIDS patients had shorter life expectancies.
Actuaries that are quite similar to those that determine the life of a product determine a life settlement life expectancy. The life expectancy helps determine the type of settlement it is going to be. A policyholder that has two years or less to live is then considered a viatical settlement. A person with three years or more to live is a senior settlement. There are five states that recognize the term viatical; the other 45 states recognize senior settlements.
The most important aspect of a life settlement life expectancy is to determine how accurate it is. If the life expectancy isn’t accurate the overall risk and return on investment will be compromised. For more information please go to LIVEpdq.