Strategies specialized in Life Settlements
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Life Settlement policies can provide consistent returns that are not tied to stock market performance.
What are Life Settlements?
Life settlements are financial transactions in which a life insurance policyholder sells their policy to a third-party investor in exchange for a lump sum payment. The investor then takes over the premium payments and becomes the beneficiary of the policy. Upon the passing away of the original policy owners the investor collects the face value of the policy.
Why include them in a portfolio?
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Low correlation with traditional investments: Life settlements have a low correlation with traditional investments like stocks and bonds because the main driver of returns is linked to longetivy. As a result, they can offer diversification benefits to investors looking to reduce their overall portfolio risk.
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Low correlation returns: Life settlements can provide a stable and predictable source of returns for investors, through their unique risk profile. Unlike stocks and bonds, which can be volatile and subject to market fluctuations, life settlements offer a risk profile based on actuarial + medical projections of life expectancy.
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Potential for higher returns: Life settlements can offer higher returns than other traditional investments like CDs or money market funds. While the returns are not guaranteed, investors can potentially earn returns in the range of 6% to 12% per year, subject to the unique risks associated with life settlements.
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Demographic trends: As the baby boomer generation ages, the demand for life settlements is likely to increase. This trend is expected to continue for the next decade or so, which could provide a favorable environment for those interested in life settlement asset exposure.