10/7/2026 12:41 AM (PST)

A life settlement investment involves acquiring an existing life insurance policy from its policyholder and assuming responsibility for the required future premiums. The investor may ultimately receive the policy's death benefit when the insured passes away, subject to the policy's terms and remaining in force. The economics of a life settlement investment are influenced by the amount paid to acquire the policy, the policy's face value, future premium requirements, fees, and the actual longevity of the insured. Life expectancy is particularly important because it helps investors estimate the potential duration of the investment. However, an actuarial life expectancy estimate is not a guaranteed maturity date. One potential characteristic of this asset class is that its primary return drivers are different from those of publicly traded equities. The investment is more closely connected to insurance policy economics and mortality outcomes. Investors should nevertheless consider the potential for extended holding periods, additional premium obligations, limited liquidity, and other risks before allocating capital. A life settlement investment should therefore be evaluated as part of a broader portfolio strategy rather than solely on its projected return.