| The life settlement market grew out of the viatical settlement market that developed
in the early 1990’s to provide
cash to needy AIDS patients. The viatical
business received some well earned
bad press, so it is important to
distinguish the modern life settlement
business from its viatical ancestors.
The early viatical businesses too often
matched desperate AIDS patients with
unsophisticated individual investors.
Much has changed, most importantly,
the funding sources. Life settlement
investors are largely institutional funders-insurance companies or banks–all
performing extensive due diligence.
Today’s life settlement companies look
at the investment much like insurance
company’s regard their annuity business,
just another actuarial job. The
policies are held in trust and the anonymity
of the insured is assured. |
|
“Policyholders who got
the information about
the life settlement
market received nearly
four times as much
value for their policies
as they would have
received had they been
deprived of this
information”
California Broker
March 2003 |
