| Understanding the Life Settlement Industry Life insurance policies are a valuable asset for their owners that can be monetized at the time that the policy matures or prior via the secondary market. The Life Settlement industry has created a more organized secondary market for life insurance policies. The industry focuses on seniors age 65 and older whose circumstances have changed since their policy was originally issued. Life Settlements offer an alternative to a once monopolistic industry. Previously, if the insured could not afford to pay the premiums associated with the policy or no longer had a use for the policy, they would surrender the policy for its’ cash value or let the policy lapse. A Life Settlement transaction allows the insured to see gains previously not realized. CBA’s Focus CBA Life Settlements focuses on providing solutions to the fragmented market of Life Insurance Settlements. Life Insurance policy owners can monetize their policy when it matures or in the secondary market. This unique asset provides non-correlated returns and opportunities to complement traditional asset classes for investors. CBA Life Settlements facilitates opportunities to source, acquire and sell Life Settlements as well as advisory and management services of Life Insurance portfolios. Applications Yield: Life Settlements vs. Corporate Bonds. Since a Life Settlement investment is like a zero coupon offering, a true yield can be realized as opposed to corporate debt offerings which assume that you are able to reinvest coupons to realize a particular yield. Pension Funds Institutions with existing credit market exposure are candidates for this product. Pension funds are exposed to longevity risk from lifetime payments to retirees. Life insurance carriers are susceptible to mortality risk (the opposite of longevity risk) because premature deaths create unexpected liabilities. By using a life-linked vehicle such as Life Settlements, fund managers can hedge this exposure and mitigate risk. 401k Participants & Tax Deferred Accounts Given the recent uncertainty in the stock and bond market, participants in 401k plans or tax deferred accounts may request an asset class free of correlated financial market risk. Structured pools of Life Settlements meet this need by providing a steady stream of high returns in step with participants’ long term investment goal objectives. High Risk Investment Products Investors in higher risk instruments such as Venture Capital Funds, Oil Exploration Funds, and other high risk investment opportunities can often collateralize their entire principal through the use of Life Settlements as a hedging strategy. Hedge Vehicle Life Settlements portfolios can also be used as a vehicle to hedge other asset classes. For example, with a mortgage portfolio one can use the proceeds from the mortgage payments to finance the premium payments of the Life Settlements and obtain the attractive returns when the Life Settlements portfolio matures (while alleviating the payoffs/delinquencies from the mortgage side). For more information, please contact us at 954.583.8800 |