How to Invest in Life Settlements?

Jan 9, 2020

Life Settlements are a rapidly growing investment vehicle. If you are not familiar with life settlements as an asset class, see “What is a Life Settlement Investment.”

Why do wealthy investors, investment bankers, and others buy life settlement contracts? 

Return

When you purchase a life settlement, you choose the contract.  Similar to picking out a house when investing in real estate. You choose the profile of the insured.

Age

Do you want to buy a policy on a younger individual, maybe age 65?  These policies can be inexpensive, however, there will be a longer holding period until the policy matures.  As a result, once the policy matures, the investor receives the profit. Do you want to invest in a policy of an older individual, maybe 85? These policies will be more expensive. However, they could have a shorter maturity time.

Health

The companies who aggregate the policies provide a relatively extensive review of the health status of the insured. Does the person have high blood pressure? Are they overweight? Do they have a heart condition? They are looking to disclose any matters that could affect the life expectancy of the insured.

How to Invest

To invest in life settlement contracts, look for an independent investment adviser in your area.  In addition, if you use an IRA or old 401k funds to make the investment, the profits are income tax free. Contact the IRA Club to establish a Self Directed IRA. In conclusion, if you take out the associated emotions, life settlements may be a great investment option for you or your Self Directed IRA.

 

For information about the Self Directed IRA or Solo 401k, call IRA Club at 312-795-0988

IRA Club offers no investments, products, or planning services. Therefore, please consult your attorney, tax professional, financial planner, and any other qualified person before making any investments.