Life Settlements

A Life Settlement is the sale of an existing life insurance policy for a lump sum of cash that is more than the cash surrender value. Through a Life Settlement, a policy owner can realize present value from an asset that is generally thought to only have a benefit when the insured passes away.

Sales of existing life insurance policies to third parties as life settlements have grown exponentially in recent years, and that trend appears likely to continue. The life settlement market has expanded rapidly in recent years. A recent study estimates that existing policies with a collective face value of $6.1 billion were sold by policyholders to investors in 2006, while others suggest that the potential market exceeds $100 billion. In a typical scenario, an insured sells an existing policy to a life settlement provider, which either holds it to maturity and collects the net death benefit, or sells the policy or interests in multiple, bundled policies to hedge funds or other investors. The insured may contact the life settlement provider directly, or through a financial adviser, or may use a life settlement broker, (which solicits bids from multiple life settlement providers on behalf of the insured). In most states, both life settlement providers and life settlement brokers are subject to licensing and other requirements.

Riderwood can assist both buyers and sellers of Life Settlements in the following areas:

• Evaluation
• Securitization
• Due Diligence
• Best Execution
• Funding
• Trading
• Portfolio Management
• Acquisition and Disposition

For more information contact:
Ray Roig, Senior Managing Director – Structured Products
Main: (410) 825-5445
Email: rroig@riderwood.com