Life Settlement Marketplace Investing

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Life settlement investors can apply for access to The Windsor Life Settlement Marketplace.

Life Settlement Investment Strategies Continue To Drive Market Growth in 2020

The life settlement niche for investors continues to grow. With reported annual increases in investment capital entering the market, coupled with increased advertising budgets for television and digital ads, consumer awareness for life settlements has increased year over year, since 2017.

The total face value of life settlements is expected to exceed $3 billion by the end of 2020, according to some estimates, up from $2.8 billion in 2017. Opportunities abound for individual investors to purchase life insurance policies directly or to invest in them through mutual funds, which are comprised of many purchased life insurance policies.

Life Settlement Investors Provide At-Risk Seniors Access To Capital For Medical Bills & Retirement.

Investing in life settlements offer significant upside in terms of return on investment. However, many seasoned investors claim the monetary rewards are secondary to the self-satisfaction and gratification of knowing their capital is helping at-risk seniors.  Life settlements, in that sense, can be more rewarding than other forms of investments. 

Life settlement consumers are often in vulnerable positions.  Many have a terminal illness and have an urgent need to access to capital to cover medical expenses and long-term care.  A life settlement or viatical settlement investor offers that financial relief.  In other cases, consumers will use their settlement to travel the world or add to their retirement funds. 

Consumer testimonials echo this sentiment.  Life settlement recipient Ted Mueller acquired his dream car with the funds from a viatical settlement.  

Sample Life Settlement Investment

  • Insured: Age 72
  • Life Expectancy: 4 years
  • Face Amount of Policy: $2,000,000
  • Cash Value: $450,000
  • Purchase Price of Policy: $600,000
  • Total Premiums Paid by Investor over 4 Years: $60,000
  • Fees and Expenses to Investor: $75,000
  • Before Tax Return to Investor: $1,265,000

The investor becomes the policy’s beneficiary and assumes the responsibility for all premium payments.

The Market for Investors

The life settlement market for investors continues to grow as the population ages. Consider the following:

  • The average life expectancy in the U.S. is 78.87 years old.  
  • 10,000 people in the U.S. turn age 65 every day.

Some estimates indicate that the average 401(k) balance at retirement currently stands at $174,100. Coupled with the ever-increasing cost of daily living expenses, housing costs, and medical expenses, the average retiree can expect to outlive their retirement savings if they survive until normal life expectancy. Retirees face even greater financial pressure if they live beyond there estimated age of death. 

A commonly overlooked asset available to sell for cash is a life insurance policy. Policy owners have the legal right to sell a life insurance policy to a third-party for cash consideration. 

Life Settlement Investment Risks, Considerations

Like any investment choice, there are inherent benefits and risks for investors in the life settlement market. Investors are advised to consult with life settlement brokers before investing in a life settlement.

Life settlements offer portfolio diversification. To help limit risk, investment advisors recommend diversification.  Life settlements are a viable investment for those that wish to diversify with alternative investments.

The primary financial risk is that the insured will live beyond their estimated life expectancy. Every year that an insured lives beyond their expected age of death diminishes the return to the investor. Not only is the average rate of return lessened, but the opportunity cost increases because the anticipated funds cannot be used for other investment opportunities.

One way that the investor can minimize this risk is to invest in life settlement mutual funds instead of purchasing life insurance policies as an individual. By combining many life insurance policies into a single basket, the financial impact of an insured individual living beyond their life expectancy is substantially lessened, thereby helping to increase the rate of return that investors realize.