Secondary Marketplace Investments in Life Settlements

A lot of money is being poured into secondary market investments in life settlements. According to Amrita, the numbers jumped nearly 100 points in one month to recoup losses from several months prior.

According to the Amrita Life Settlement Index, an increasing number of Americans are being offered money to sell or pursue buyers directly to unload an unwanted life insurance policy they no longer require.

Rather than letting it lapse, astute policyholders are arranging for a third party to become the policy’s beneficiary. As a result, when the policy owner dies, the investor receives the payoff.

Life settlements are a more profitable option than cashing out your policy or simply letting it lapse. Many of the investors who purchase these policies are insurance agents. When the policyholder dies, they receive substantial financial benefits.

Amrita’s monthly index increased by 92.8 points in April 2010, rising from 324.6 to 417.4. This increase of 28.6 percent reversed the previous two months’ losses. Life settlement companies attribute this shift to market activity.

“Provider surveys indicated increased competition among buyers for life insurance policies,” according to the report. “Furthermore, respondents expressed a positive outlook for the life settlement market in the future.”

According to the Insurance Information Institute, consumers who are unable to pay their life insurance premiums may allow their coverage to lapse, cash out with their insurance provider, or pursue a non-forfeiture option in addition to seeking life settlements. The final option enables policyholders to keep their coverage in exchange for certain benefits.

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