RT Journal Article
SR Electronic
T1 The Impact of Life Expectancies on the Life Settlement Industry
JF The Journal of Structured Finance
FD Institutional Investor Journals
SP 131
OP 136
DO 10.3905/jsf.2012.18.1.131
VO 18
IS 1
A1 Kiri Parankirinathan
A1 Barry Reed
A1 Tom Bakos
YR 2012
UL https://pm-research.com/content/18/1/131.abstract
AB This article describes the impact of life expectancy in the life settlement market with respect to the rate of return to investors and the values of policies. The life settlement industry overlooks, in valuation as well as selection criteria, many factors that are critical in purchasing life settlement policies.The article provides an overview to help the reader understand the risks associated with life settlement purchases as well as additional tools that may be utilized in valuing the policies/portfolios. The article points out the need for reasonable actuarial assumptions as well as the need for medical underwriting to properly consider the health and lifestyles of the affluent seniors whose life policies currently are the most frequent components of life settlements. In addition, the article explains the need for an industry standard with respect to underlying actuarial assumptions and medical underwriting guidelines.TOPICS: Retirement, pension funds, wealth management