Risk Factors

gold-riskThe payout of a Life Settlement transaction is not impacted by stock market volatility, interest rate fluctuations, variations in the economy, or foreign instability.  The factors that do affect life settlement pay outs are few, and they are considered very carefully for each policy before it is offered to a participant.


An insurance company can contest the payment for death benefits.  This time period is usually up to 2 years after the policy is originally purchased.  This two-year period is commonly referred to as “The Suicide Clause.”  Therefore, Sage Life Equity Direct does not consider policies that are not at least 2 years old.

Premium Reserve

The purchaser of a life settlement is obligated to make future premium payments to keep the policy in force until maturity.  A Premium Reserve Methodology provides safeguards to reduce premium call risks to investors.

●  Policy Specific Reserve:

    (used only to offset individual policy premiums)

    Sage Life Equity Direct has set up a Premium Reserve Maintenance Account with a third party trust to pay premiums during the Life Expectancy period of each policy.

    Example: Life Expectancy = 60 months

    Individual Policy Reserve = 60 months


No one can predict exactly when an insured will pass away and the policy will mature. Because the exact date is the single factor that determines the effective annual rate of return, the shorter the longevity of the insured, the higher the effective annual return.  In contrast, the longer the longevity of the insured, the lower the effective annual rate of return.  This risk is mitigated through diversification among multiple insurance policies and the law of large numbers.  Longevity risk is also offset by selecting policies in an older insured age range with health issues basing payout on a known factor which is the face amount of the policy.  Sage Life Equity Direct takes additional steps to mitigate tail end risk.

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Portfolio Risk Analysis


A Portfolio Diversification Tool

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