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Life Settlements Introduction

Many people don’t know what a Life Settlement is. This gives me an opportunity to educate my clients and those around me on one of the largest, safest and most profitable asset classes I work with and available today. Simply put, a life settlement is the purchase of an existing life insurance policy through a secondary sale. Why would someone sell their life insurance policy and forgo the death benefit? There are many answers to this question: the insured may not need the insurance anymore, premiums may become too expensive, or the insured may need money over what is available in the cash value of the policy. These are options available to all policy holders.

These policies, as investments, are a great alternative to most of my client’s safe money. If you are looking for an investment with no market risk and reasonable returns, sometimes in the double digits, this may be an exciting opportunity to learn how to add Life Settlements to your retirement strategy. With all life insurance policies, a premium is paid to receive a death benefit. This is also the case of life settlements. When a policy is sold the, a professional actuarial team gives a calculated estimate of the life expectancy of the insured. This is necessary to determine the cost to purchase the policy, as well as the premiums due to life expectancy. These numbers along with a small fee to service the policy are combined to determine the cost to invest into the policy. Typically the shorter the life expectancy the more expensive the policy is. Life expectancy does not determine the amount of the premium, only the amount that needs to be set aside to pay through life expectancy.

This investment class is not short term. Most of the policies held by my investors are anywhere from three years to seven years, some as long as ten. For this reason, I suggest this investment to those with cash reserves that will not be needed in the interim.

If this has peaked your interest, I would be happy to sit down and discuss more regarding this asset class, life settlements. Give us a call today or check out when the next upcoming seminar will be in your area.

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