How it Works
A Senior Life Settlement functions very similarly to a zero-coupon bond. The purchaser is buying future dollars at a significant discount. In consideration for premiums paid, the life insurance company will pay the death benefit at the insured’s passing provided the contract is in good standing and all premiums are paid up to date. Unlike any other market-based investment, Senior Life Settlements behave like a performance contract and it should be noted that the US Legal Reserve Life Insurance System has never failed to pay a legitimate claim since the inception of the industry. The only trigger affecting the purchaser’s receipt of the death benefit is the mortality of the insured.
Relative to other risk-adjusted fixed-income investments, the return characteristics are attractive and there are no human or other variables like manager performance or geo-political upheaval that affect the outcome.
Senior Life Settlements provide exposure to a unique non-correlated asset class with a known cost and a known yield, with only one primary risk…time. These characteristics make them particularly appropriate for high-net-worth investors in search of portfolio diversification and low-volatility, risk-adjusted returns.