This article was originally published in the July 2009 Life
Settlements Review
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,
