The History of the Life Settlement Industry
The life settlement industry in the United States has existed for nearly two decades; the concept however, of life insurance policies as an asset that may be assigned for value has a much older history and is well established in U.S. law. In 1911 a United States Supreme decisions, Grigsby v. Russell, generally is seen as having given birth to the future life settlement industry. That decision gave life insurance policies the characteristics of “property” and upheld the right of individuals or policy owners to maximize the value of their “asset” (the life insurance policy) by selling their policies in the secondary market rather than allowing them to lapse or surrendering them to the insurance company for cash value.
Conversely, the purchaser benefits by investing in an asset that has an inherent, stated value, does not rely on future market conditions for appreciation, provides the opportunity for superior returns without a parity of risk, and is not directly correlated to business cycles, commodity prices or the performance of the financial markets. In short, life settlements provide true diversification for your investment portfolio.