A sampling of 11 life settlement companies paid a total of more than $854 million dollars above cash surrender value to owners of life insurance policies during the years of 2004 and 2005, the Life Insurance Settlements Association says.
LISA, Orlando, Fla., says the study was designed to quantify the impact of life settlement companies by showing how the 11 paid insureds over the 2-year period.
During that time period, the companies settled a total of 3,437 policies. Of those, 2,025 were sold on the secondary market during 2005, a sharp increase over the 1,412 sold during 2004.
The number of newer policies sold on the secondary market also increased between the 2 years. In 2004, 30.7% of the policies sold had been purchased within 2 to 5 years beforehand, with that figure rising to 35.2% the next year.
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The data on policy age is incomplete, however, in that no age of the policy was given for 28.2% of policies sold during 2004 and 24.2% of the policies sold during 2005.
The report, officially dubbed the Data Collection Report, was a result of discussions at the 2006 LISA spring meeting in New York City, the group said.