A Senior Life Settlement is a socially responsible transaction that benefits seniors. When a senior insured decides, “I want to sell my life insurance policy,” it is well-documented that the seller will receive a significantly greater amount by selling their policy to a life settlement company than they will to surrender it back to the carrier, or worse…stop paying the premiums and let the policy lapse worthless.
Senior Life Settlements benefit investors because they have a known cost and a known yield. Capstone’s proprietary Premium Reserve Management (PRM) Algorithm mitigates the risk of premium calls due to extended longevity by ensuring policy premiums are paid and the life insurance contracts remain in good standing. The Senior Life Settlement asset class creates many additional advantages for investors as well:
- The primary risks of owning Senior Life Settlements are reduced to time to policy/portfolio maturity and liquidity
- Senior Life Settlements avoid most all other risks like geo-political upheaval, market downturns and natural disasters
- The investor can expect to receive an attractive Illiquidity Premium in exchange for withstanding the time to contract/portfolio maturation.
- The yield characteristics of Senior Life Settlements are very attractive relative to other investments with a similar risk profile
- Due to the permanence and predictability of this alternative asset class, investors can allocate their higher risk capital elsewhere
- The risk mitigation attributes of Senior Life Settlements reduce portfolio volatility (beta) and stabilize returns (alpha) in an investor’s overall asset allocation
- Senior Life Settlements can be purchased with cash or they can be owned in a Self-Directed Individual Retirement Account (SDIRA)