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Hedge funds that have acquired life settlements, for example, are keen to buy and sell policies more easily, so they can cash out both on investments that are losing money and on ones that are profitable.
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Also, acquire life preservers too.
Life settlements generally involve long-standing "permanent" universal life and variable universal life insurance.
There is "a legitimate purpose in viaticals and life settlements," said Kim Holland, the insurance commissioner of Oklahoma, which passed a law in 2008 regulating settlement buyers.
Viatical settlements are not subject to income tax, Mr. Massey said, but life settlements are, and the amount depends on whether the policy has a cash value.
Transactions like these with strangers are euphemistically called life settlements.
Investors in life settlements are typically seeking 14% to 20% annual returns.
Most life settlements do pay out far more than the policy's cash value.
Life Partners Holdings : Life Partners was a pioneer in secondary life insurance, offering "life settlements" to terminally ill or elderly clients.
Enter life settlement companies.
Life settlement offers it a chance to do the former.
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