United States: Securitization Of Life Insurance Settlements

Life insurance settlements ("LIS") constitute a potentially attractive candidate asset class for the issuance of rated securitized paper. The most recent longevity and demographic statistical information suggest that there will be a significant increase in supply of assets over the next 20 years. In 2007, there was approximately $9.2 trillion of life insurance in force in the United States. Of that amount, $416 billion in life insurance is owned by individuals over the age of 65. Only a small fraction of that amount, $15 billion in face amount, was sold or traded in 2007 in the secondary market. The number of 65 year olds is projected to increase dramatically over the next two decades from 37 million individuals to 72 million by 2030. Based on this increase in the number of persons eligible for life settlement transactions and assuming the same percentage of seniors with life insurance, by 2030 there will be roughly $800 billion in life insurance owned by seniors 65 years of age or older with $161 billion eligible for life settlements...

Mondaq: United States: Securitization Of Life Insurance Settlements