Recovery Underway In Life Settlement Industry

Written By: Kelly Ramirez on June 4, 2010 No Comment

As the possibility of a global double dip recession looms in the distance, the life settlement market is seeing some positive signs. After a difficult 2009 and early 2010, life settlements look poised to be on the rise. Overall, industry participants are cautiously optimistic about the near term future of the secondary life insurance market.

Industry experts are drawing some optimism from recent anecdotal evidence. Life settlement providers were previously paralyzed due to a lack of funding. Some went out of business, but those that survived are now seeing a return of funding sources. In fact, some providers are now representing multiple funding sources and aggressively looking for cases from life settlement brokers.

A rise in April’s life settlement provider activities caused the Amrita Life Settlement Index to report a spike in its most recent release of data. In particular, an increase in bidding activity among providers was a significant factor in the rise of the index. Additional bidding on life settlement cases suggests a more competitive environment and a market that is becoming healthier. Ultimately, the increased competition results in higher policy valuations and sales prices for sellers.

With a Life Insurance Settlement Association trade mission to Europe and explicit interest in the American life settlement market from European interests, many in the United States were hoping for a recovery based on international investment. The recent Euro Dollar decline and European sovereign debt crisis has left investors from across the pond somewhat impotent. European investment funds and institutions are cautiously sitting on capital to preserve liquidity.

Although Europe may not be the savior of the American life settlement industry, we may not need them. Small but important signs are pointing to a recovery that is already underway. Life settlement providers have money and are actually buying policies. Compared to the troubling time of the recent past, this is a welcome change in anyone’s book.

Want to find out more about a life insurance settlement, then visit Kelly Ramirez’s site at www.AmritaFinancial.com.