A sampling of 11 life settlement companies showed they paid a total of more than $854 million above cash surrender value to owners of life insurance policies during the years of 2004 and 2005, the Life Insurance Settlement Association says.
LISA, Orlando, Fla., says the study was designed to quantify the impact of life settlement companies by showing how they paid insureds over the 2-year period.
During that period, the companies settled 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 rose between the 2 years. In 2004, 30.7% of the policies sold had been purchased within 2 to 5 years before, with that figure rising to 35.2% the next year.
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.