Blackjack. Roulette. Craps.
Three games of odds. Three opportunities for you to make money. Three instances when you're probably going to wind up losing in the long run. After all, the house always wins.
Like these casino games, insurance is also a game of odds.
Insurance essentially requires you to bet on something bad happening. You may never need flood insurance, but you wouldn't want to be caught high and dry without it. So you hedge your bets and cover your assets by paying monthly premiums for flood insurance – even though the odds of your home ever flooding are statistically miniscule.
Does that make insurance a bad bet? For the sake of your flooring, furniture, and home's foundation, you're probably hoping that you never need to cash in on your flood insurance.
Either way, it's good to have insurance because it gives you peace of mind, even if it is a game of odds – most of the time.
There is one type of insurance that is a sure bet: the kind that's permanent.
Betting on One of Life's Only Guarantees
It's been said that only two things in life are guaranteed: death and taxes.
It's a fact that, sooner or later, everyone will pass away. It is also a fact that permanent life insurance is guaranteed to deliver a death settlement (unless the policy is surrendered or allowed to lapse).
The only questions surrounding the death settlement are "When?" and "To whom?"
The answer to the former cannot be found. The latter, however, is a whole other issue – because you can invest in permanent life insurance policies (thanks to life settlements).
And it's a safe bet.
Betting on Life Insurance
Thanks to a 1911 U.S. Supreme Court ruling, life insurance policies are considered saleable assets, just like real estate deeds or mortgage contracts.
This means the owner of a life insurance policy can sell it to an investor in exchange for a lump sum payment. These transactions are called life settlements.
Life settlements are unique because they are truly win-win opportunities.
The sellers get to unload unwanted, unnecessary or unaffordable life insurance policies in exchange for a payment that it typically more than the policy's cash-out value but less than the death benefit.
That's certainly a win for the seller.
But what about the buyer?
Why Investors Love Life Settlements to Death
By now you probably have a lot of questions. After all, it's not every day that someone suggests you invest in life insurance, which touches on two topics most people don't like to discuss (death and finances).
But if you can bring yourself to look at the issue through the lens of an investor, you'll likely see why investors love life settlements to death:
- Life settlements are unaffected by the ups and downs of the stock market, making them an ideal way to diversify and crash-proof your portfolio.
- They are not affected in any way, shape or form by politics, military actions, global economics or natural disasters.
- There are no active management or ongoing management fees because life settlements are simply "buy and hold" investments.
- The return on your investment is not dependent on management skills – you've purchased an asset and the only risk variable is time.
- They deliver consistent rates of return in the high single-digits to the low double-digits.
Are You Ready to Make the Sure Bet?
When it comes to investing, it seems like Wall Street always holds all the chips. Investing in life settlements is a way for you to add a little insurance to your portfolio.
Contact us today if you're ready to go all-in.