8/24/2026 9:43 PM (PST)

Life insurance as an investment can take different forms depending on the policy and the investor's objectives. Certain permanent life insurance policies may build cash value over time, while existing policies can also become investment assets through the life settlement market. From an alternative investment perspective, a life settlement involves acquiring an existing life insurance policy for more than its cash surrender value but less than its death benefit. The investor assumes the required premium obligations and may receive the death benefit when the insured passes away. The potential return is influenced by the policy acquisition cost, premiums, death benefit, and the insured's actual longevity compared with the life expectancy estimate. This makes life settlements different from traditional investments whose performance is closely tied to financial markets. Investors should consider liquidity, holding period, premium requirements, underwriting assumptions, fees, and regulatory considerations before investing. Life insurance can serve different purposes, so the appropriate structure depends on an investor's objectives and circumstances.