Life SettlementsA life settlement is simply the sale of an existing life insurance policy by a terminally ill or elderly person to another party. The price of the policy is negotiated and sold by the owner at a discount to the face amount. The purchaser then collects the full amount paid out under the policy. Life settlements are similar in nature to a zero-coupon bond. Policies are purchased at a discount to their face value. These discounts fall into general brackets according to the life expectancy of the insured, but will vary slightly based on individual policy features and market conditions for the policy. Return on investments is computed from the difference between the cost basis (including any premiums paid) and the amount paid out under the policy upon the demise of the insured. An annualized return on investment may be derived from this yield by adjusting it for the holding period of the investment. The acquisition cost includes all of LPI's fees and costs associated with the transaction as well as an amount for the payment of premiums during the maximum life expectancy of the insured. In the event the escrow is depleted before the demise of the insured, the purchaser is responsibility for replenishing the account to the extent of the owner's interest in the policy. All policy purchases are regulated by the Texas Department of Insurance and are closed through an independent escrow agent Policies issued by some of America's oldest and most financially sound life insurance companies. You enjoy the same regulatory protection available to all life insurance policy holders. even during the Great Depression, life insurance companies still paid off on their policies Compare the potential yield from Life Settlements to other type of investments. Life Settlements are not directly correlated to fluctuations in the stock or bond market, interest rates and business cycles while still providing the opportunity for exceptional returns on investment. Normally, exceptional returns require accepting enormous risk to both principal and return. Not so with Life Settlements. Because the key factor affecting yield is time, rather then economic conditions, exceptional returns can be realized without a parity of risk to investment capital. This information is provided by Life Partners, Inc.
|
