I understand the the life settlement/viatical industry started out
when aids caused those afflicted with the condition to sell their
life insurance policies to either use or enjoy a percentage of the
death benefit while still alive.
and since convenience always has a cost–people like warren
buffet and others with vision and available operating capital
would buy large bundles of these policies at a discount and
make a profit upon the death of the policy holder.
the sales by aids patients has leveled off and the sales of
policies initiated by sales organizations in structured format
to take advantage of the mortality tables used by insurance
companies when the sell policies that 85% of policies laps
before death so those that hold a policy the full term get
a much higher return on investment than they would if they
cashed out early. there is money being made on all of these
transactions–who is positioned the best to profit???
who is making money in the life settlement market and how??
19
Feb
Mark S
February 19, 2010 at 1:19 pm
The companies who buy the insurance contracts from terminally ill people are the ones who benefit the most. Well, I will say they are betting that they will get the death benefit before many years go by. Why? If it takes long for the person to die, it takes money out of the investment of the contract. The sooner someone dies, the more money they make.
aaron p
February 19, 2010 at 1:45 pm
I almost ignored this question without knowing why you were asking. I get it now. Unfortunately, the life settlement market was really developed in a sophisticated enough environment so that everyone involved could wash their hands. That just means it’ll be more of a challenge for your guy to find legal fault. Am I getting warm?
Finance firms are big, investor firms are huge, brokers and BGA’s are sometimes gullible when money is involved, and insurance companies occasionally know more than they let on to their re-insurers.
If you were local, I’d say “let’s do lunch”, how about email me? I’ll help you find a niche.
mbrcatz17
February 19, 2010 at 2:01 pm
Attorneys. Because regardless of how things come out between the insureds, insurance companies, and investors, the attorneys always get paid from all parties.