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Life settlements involve the sale of either a senior’s existing life insurance policy, or a newly purchased one, to corporate investors. As the new beneficiaries, the investors make potentially large profits, particularly when the senior dies sooner than expected. The senior can profit as well, from fees paid to them upon sale to the investor (average $15,000.). The amount of these fees depends upon the senior’s age, health, and income, and although the fees are taxed as income, there are no out-of-pocket or up-front costs to the senior, who no longer pays the policy’s monthly premiums. Sounds like a win-win situation, but not necessarily.

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Nudgem Richyal, a fund manager at JO Hambro Capital Management (JOHCM), has moved into the life settlement market, an area he says is in early cycle growth.He has added Traded Life Policies (TLPs) to the Global Select portfolio as an uncorrelated asset class, which he says has not experienced the downturn other categories have suffered in the past year.

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Settlement Plus, a professional life settlement firm that has secured millions of dollars for its clients through the life settlement process, is proactively educating its clients and the CPA community about the opportunity to unlock the hidden assets that may exist in current life insurance contracts.

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LFXG 0.12, -0.03, -20.0%) announced this morning the launch of their new bi-monthly life settlement and longevity markets trade report. The Life-Exchange Trade Report features valuable information on the growing life settlement and longevity risk markets. Data includes volume statistics, trade data, yields and other key industry specific data. The proprietary data and analysis is based on a compilation of trade data from Life-Exchange’s auction platform, industry participant surveys, government statistics, and public sources.

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While life settlement experts caution financial advisers that tapping into insurance policies is fraught with tax and estate-planning risks, some business owners may be tempted to sell their policies if other financing options are unavailable.

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Advanced Settlements, Inc., one of the oldest and largest life settlement brokers in the nation, has been able to help policy-sellers by working with over 25 large institutional funding sources despite major obstacles in the life settlement industry that included two of the major life expectancy companies raising their LE’s over 20%. “During these turbulent economic times, financial professionals need to rely on a broker that is up to date and completely aware of changes that are occurring in the life settlement industry such as mortality increases and buyer availability,” said Scott Kirby, Co-President of Advanced Settlements, Inc. “With the current economic conditions, being able to have reliable capital sources to purchase policies and recognizing where to find them, further emphasizes the need to have a knowledgeable broker working your life settlement cases.”

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Settlement SYNC, a New York Life Settlement Broker, formally announces an interest in helping all insureds over the age of 70, with policies from either AIG or John Hancock, unlock hidden assets through the life settlement process. The policies that are being sought are those with a face value of $50,000.00 and higher.

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That’s according to Paul Aguirre, president, Equity of Life, LLC, in Plymouth Meeting and Skippack, a company that focuses on life settlements — either the sale or assignment of a life-insurance policy to a financial institution for a lump sum cash payment — for people 65 years old and older, who aren’t terminally ill, and who have a life expectancy greater than two additional years.

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Settlement SYNC, a New York Life Settlement Broker, is currently seeking the Life Insurance policies of potential clients who have such assets currently underwritten by the former insurance giant, American Insurance Group (NYSE: AIG). These policies can be settled by the professional staff of Settlement SYNC through numerous different institutional investors, and in most cases the clients will see an increase in current cash surrender value(CSV) in upwards of 100-550%. As long as an acting agent brings the policy to our staff, we will be able to review the policy and create a quote for the client. We are ideally seeking policies containing three very important criteria. The policy must first be underwritten by AIG, the insured must be at least 70 years old, and the face value must be a minimum of $50,000.00.

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Here is an illustration of how life settlements work, using a hypothetical example of a single policy sold by an 80-year-old man. It assumes that he has a life expectancy of five years, is insured for $1,000,000 upon death and pays an annual premium of $40,000.