Simplifying the customer experience
Today, as has been the case since the life insurance industry’s inception, it is unlikely for contract owner to lose their policy benefits. There is no legal precedent for a legal reserve life company to fail to pay a legitimate claim due to insolvency in its history.
Evolving in an online market.
A life insurance policy is a security in which you are investing when you buy a life settlement. Life insurance is an ultra-secure store of value but the fact that it is a legal, actionable contract that is the payment mechanism behind the security is as important.
Life settlements have a low correlation to almost all other asset classes because human longevity and markets, interest rates, and random events are unrelated.
A portfolio of life settlements achieves diversification and differentiation by combining multiple policies of varying carriers, face amounts, life expectancies, and genders together to spread concentration risk like a mutual fund.
Investors gain exposure by buying a fractional share or a percentage of the portfolio at a discount to the aggregate face amount of the portfolio. The investor then receives a stream of benefit payments from the maturity of each policy in the portfolio as they are individually mature. Each dollar is returned to the investor with an absolute return equal to the discount on the face of the policy attached to it.
The risks are an uncertain time to maturity and the only source of liquidity is created from policy maturities and should be considered a mid-to-long-term buy and hold.