Life Settlement and Viatical Life Expectancy Providers (Actuaries)
The life settlement industry is big business, both for providers who typically purchase life insurance policies from their original owners, and investors who buy the instruments as investments.
Reuters recently valued the life insurance market at over $26 trillion in 2006, and a large chunk of these policies are owned by retiring baby boomers.
The life settlement business consists of the resale of life insurance policies, surrendered by their original purchasers, for an immediate cash payout. The policies are then resold to investors.
With respected investors like Warren Buffett and institutional investors such as Credit Suisse and Deutsche Bank entering the market, Reuters reports the market has gained a certain respectability as an investment vehicle.
One crucial player in this market is life expectancy providers (LEP’s). Usually independent companies, they serve the vital role of estimating a life insurance policyholder’s life expectancy. They issue life expectancy reports that detail this information to both selling and buying parties.
That number figures large in the purchase of these secondary market investments. It’s one of the most important factors involved in pricing a life settlement policy, in addition to other factors, such as the underlying insured’s age and health condition.
The reports don’t predict the life expectancy of an insured. Instead, the LEP’s use actuarial data to arrive at an average survival time for a particular risk group. Group characteristics may include age, gender, smoking, and other health and morbidity items of the group in question.
By creating this risk group data, the LEP’s make it easier and more transparent for all parties to a transaction – the insured selling the policy, the life settlement company buying/brokering it, and the purchasing investor.
Much like an insurance underwriting group, LEP’s employ medical underwriters and actuaries. In addition to referencing data supplied by the Society of Actuaries, they rely on proprietary data they have collected and analyzed over time.
Life Partners Life Settlement and Viatical life expectancy data questioned
Recent news reports have put into question the accuracy and independence of the life expectancy methodology employed by life partners actuaries. These questionable practices have lead to an SEC investigation to probe allegations of securities fraud against Life Partners.
Have you purchased Life Settlements (Viaticals) from Life Partners Holdings?
If you have purchased Life Settlements from Life Partners, you may be able to join a legal action to receive compensation for your losses. Complete the form on this page, or call 1-800-934-2921 to find out if you have a case.