Market Opportunity
The U.S. secondary market for life insurance policies has experienced phenomenal growth over the past several years. While the face-value of life settlements policies accounted for around $50 million in 1990, that figure catapulted nearly sixty fold to approximately $3 billion in 1999, according to some estimates. Estimates for 2005 are between $6 and $8 billion. Within ten years, estimates for the face value of life settlement policies sold in the United States range anywhere from $10 billion to $45 billion.
"The holders of life insurance policies who sold their policies in 2002 received $242 million that would have been forfeited to insurance companies."
Source: The Wharton School of Business at the University of Pennsylvania. "The Benefits of a Secondary Market for Life Insurance Policies," 2002.
"Categorized by some as 'a sleeping giant', the secondary market for life insurance policies has grown from an estimated $50 million in 1990 to estimates that exceed $134 billion today."
Source: On Wall Street, Nov. 2002.
"After savings accounts and government bonds, life insurance may be the most respectable of investments due to the new secondary market for life insurance policies."
Source: The Economist, May 2003.
"In 1998 the 40 to 50 mostly small companies that made up the industry exchanged about $1 billion in life insurance policies, up from just $50 million in 1991. Now, the industry is moving to extend the marketing of Viatical settlements to healthy seniors through so-called 'life settlements', a vast market potentially worth $108 billion. Many viatical insiders believe that eventually Wall Street companies will sell shares in large pools of 'used' insurance policies."
Source: Conning & Co., 1998.