Asked by don meyer  |  Submitted September 19, 2014

Are life settlements policy a bad investment?

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  Answers  |  3

September 22, 2014

Life Settlements are considered an alternative to bonds and are less liquid. They have no correlation to interest rates like bonds and generate higher than average returns. They generally come in two forms, direct participation in the pool or as a note holder with the note secured by the policies. Due to the lack of liquidity, a 5 - 15% of the portfolio value is generally suggested.

$commenter.renderDisplayableName() | 09.26.17 @ 18:38


February 02, 2015

Like anything, they have the potential to be a bad investment. They can also be a very safe and lucrative investment as well. Berkshire Hathaway and big banks allocate a healthy percentage of their money into this asset class for a reason....good safe returns. The industry is much better regulated now than it used to be 10 yrs ago. I would avoid buying single policies with a high risk of "premium calls". There are a few good companies that bundle 5-6 policies at once and have 10 yrs of reserves so there is never a premium call and your money turns over quickly. True it is less liquid than some other alternative investments; however if done right, you can see safe returns of around 17% apy and no market risk.

$commenter.renderDisplayableName() | 09.26.17 @ 18:38


March 03, 2015

Your investing on people passing away, it's a moral judgement.
Plus, you might pay for a longer expected time then you might anticipate.

$commenter.renderDisplayableName() | 09.26.17 @ 18:38


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