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Benefits to Purchasers of Senior Settlements

Benefits of Life Settlements

Happy CoupleLow Market Correlation

An investment in a life settlement offers an excellent way to diversify any portfolio and also serves as a great defensive strategy since the return is not dependent on or affected by a soft economy, stock market volatilities, interest rate fluctuations, unexpected global events, or other traditional economic factors.

Standard Deviation of Life Settlements
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Strong Risk Adjusted Returns

Investing in Life Settlements provides for the opportunity to earn attractive yields, particularly in today’s low interest rate environment.  Projected returns for life settlement investments are targeted in the high single digits in a fully managed fund scenario.

These returns are certainly better than any of the equity markets and major market indices over the past 15 years.  The Standard and Poor’s 500 Index has returned an average of just 4.37% from 2000 to 2018.  Given the current economic, political and global landscapes, it is reasonable to assume Life Settlement returns may be higher than market indices for the foreseeable future.

Underlying Asset is a Highly Rated Insurance Company

Portfolios and policies structured are issued by highly rated insurance companies such as Met Life, Prudential, John Hancock, Mass Mutual and New York Life.  Many of these institutions have been in existence for over 100 years and represent some of the strongest companies in the world.  The claims paying ability of these entities is independently reviewed by rating agencies such as A.M. Best Company and Standard’s and Poor’s (S&P).

Targeted Performance through Forecasting and Selective Criteria

The return on a life settlement is contingent upon the maturity of each life insurance policy (i.e.- death of the insured).  The return is a function of the death benefit collected minus the cost to acquire the policy, the premiums paid to maintain the policy, and other policy servicing fees.

With the exception of “when” the policy will mature, all other costs can be reasonably estimated such that projections can be done in advance to illustrate the projected returns at various points in time.  This sensitivity analysis provides a range of likely outcomes that can help investors quantify their decision making process.

The use of independent third parties to provide life expectancy underwriting provides the estimate of “when” the policy will mature.  Independent underwriting firms utilize specific actuarial tables and in-depth medical analysis to estimate life expectancies.  Sage Life Equity Direct employs stringent policy standards and utilizes highly recognized industry service providers to meet these challenges.

Underlying Asset is a Highly Rated Insurance Company

Portfolios and policies structured are issued by highly rated insurance companies such as Met Life, Prudential, John Hancock, Mass Mutual and New York Life.  Many of these institutions have been in existence for over 100 years and represent some of the strongest companies in the world.  The claims paying ability of these entities is independently reviewed by rating agencies such as A.M. Best Company and Standard’s and Poor’s (S&P).

Targeted Performance through Forecasting and Selective Criteria

The return on a life settlement is contingent upon the maturity of each life insurance policy (i.e.- death of the insured).  The return is a function of the death benefit collected minus the cost to acquire the policy, the premiums paid to maintain the policy, and other policy servicing fees.

With the exception of “when” the policy will mature, all other costs can be reasonably estimated such that projections can be done in advance to illustrate the projected returns at various points in time.  This sensitivity analysis provides a range of likely outcomes that can help investors quantify their decision making process.

The use of independent third parties to provide life expectancy underwriting provides the estimate of “when” the policy will mature.  Independent underwriting firms utilize specific actuarial tables and in-depth medical analysis to estimate life expectancies.  Sage Life Equity Direct employs stringent policy standards and utilizes highly recognized industry service providers to meet these challenges.

AAP LIFE SETTLEMENT INDEX

aap-life-settlement-index
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The AAP Investable Life Settlement Index is comprised of open-end life settlement funds outside of the US. As to the best of AAP’s knowledge the valuation of the assets of the enclosed funds lies within the prevailing market environment. This shall ensure that the funds are ‘investable’ for investors. The index components are weighted according to a proprietary scorecard of AAP, the weightings may change at any time.

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