Life Settlement - Crown Alliance Capital
by Fajar Hakim ResearcherA Life Settlement is the purchase of a life insurance policy
at a discount from face value from a person who no longer needs or wants the
policy.
The policy owner receives a lump sum settlement and the
title for the policy is transferred to a third party, which pays the future
premiums due on the policy and eventually collects the death benefit.
Previously, the only other option for seniors was for a policy to lapse. Then
it was observed that the difference between what a policyholder could receive
for surrendering their policy versus the fair market value for their policy is
simply astounding. A 2002 study by the Wharton School at the University of Pennsylvania
found that while the surrender value for average policyholders amounted to a
total of 93.4 million dollars, the fair market value for policy holders
amounted to $336.3 million dollars combined.¹ This represents a shocking 360%
difference between the cash surrender value and selling the policy as a Life
Settlement; and the same still holds true today. This is a principal reason why
this “Asset Class” has been so popular with “Smart Money” (institutional
investors) and now available to our investors through investing in Crown
Alliance Capital Limited.
¹ (The Benefits of a Secondary Market for Life Insurance
Policies by Neil A. Doherty and Hal J. Singer)
Life Settlements became more sophisticated as actuarial
techniques and advanced financial analysis were implemented during the
underwriting process. The senior population has redefined the life insurance
settlement industry, expanding the industry into a multi-billion dollar market.
The industry today is almost entirely comprised 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 ancillary and service providers.
Life Settlements are potentially very profitable because the purchaser acquires
a policy at a discount from the face value, which is based on the insured
person’s life expectancy and the purchaser’s desired return on capital. The
potential rates of return can be in excess of 12-15%
SOURCE LINK:
http://crownalliancecapital.com/life-settlement/
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Created on Dec 31st 1969 18:00. Viewed 0 times.