Life Settlements

What is a life settlement?

A life settlement is the transfer of ownership and beneficiary rights of an unwanted or unneeded life insurance policy in exchange for a cash settlement. Life Settlements are based on the premise that many individuals no longer need or can afford to keep paying premiums on their insurance policies. The seller no longer has the responsibility of paying future premiums. In exchange, investors profit based on the difference of the face value of the policy and acquisition and maintenance costs.

The secondary market landscape is dominated by people typically aged 65 and older, some with medical impairments resulting in shortened life expectancies.

Life Settlements became more sophisticated as actuarial techniques and advanced financial analysis were implemented during the underwriting process. With the senior population adhering itself to traditional underwriting guidelines, the Life Settlement industry could then leverage the existing foundation of the life insurance industry and with a supply of life insurance policies that has grown exponentially into a multi-billion dollar market. The industry today is almost entirely composed of a few mainstream capital sources that have revolutionized the speed and scale of the secondary insurance market. The industry has also become more specialized, with seniors working with financial advisors, brokers, and a number of service providers.

Life Settlement Market

Nobody knows the life settlement market like our managers. As our funds continue to expand, we are creating even more efficient strategies to give investors access to life settlements. These strategies include supporting legislative and regulatory proposals favorable to our expansion while strengthening the rights of owners and buyers. As the largest aging population in US history is poised for exponential growth in the next decade, consumers realize the mutually beneficial opportunity.

Life Settlement Regulation

The Life Settlement industry is highly regulated at the state level. There are some common features of United States insurance law, which create a sound foundation for secondary life insurance market growth in the United States. These common features explain why the origination platform for Life Settlements is located primarily in the United States.

Many states in the US have introduced regulations that encourage investors to view life settlements with greater confidence. These regulations aim to create more efficiency in the marketplace and provide both buyers and sellers with a highly structured transaction process.

Tertiary Market of Life Insurance

Since 2009, the industry has developed a tertiary market for life insurance (secondary market for life settlements), in which investors, can trade blocks of life settlements among each other. This tertiary market continues to grow to record transaction volumes and provides additional liquidity to the life settlement asset class. As volume increases in tertiary transactions, so does the liquidity profile of the asset class and the attractiveness of the opportunity to large, sophisticated institutional investors.

Investment Process

In Luxembourg Life Funds, our managers have not only pioneered various aspects of the Life Settlement market, but have also invested significant time, money, and resources in creating direct origination relationships. Our managers utilize long-standing partnerships and marketing facilities to provide investors with the most efficient and profitable policy acquisition strategies. As a result, our Funds underwrite only the highest investment grade assets while realizing higher margins on transactions.

Carlisle Management Company’s success in marketing comes from years of experience, strategy testing, monitoring, and refining our approach to the life settlement industry. Our top-quality team, enable with our market intelligence, can anticipate changes, identify new sources of policies, and participate as leaders in the market. Our team relies heavily on effective communication strategies to reduce new customer acquisition expenses, maintain transparency, and boost return on capital invested.

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