What does the term “Secondary Market” mean in life settlement transactions?
Life settlement brokers typically buy policies from policyowners and resell them in secondary markets to other brokers or specialty portfolios for a profit. A policy may go through two or three sets of hands before it finds a home. The result is that the individual insured’s medical and often financial information is being shopped multiple times to numerous brokers on the internet before the policy ends up in the hands of a consolidator who holds the policy to maturity. Reported abuses and fraud have generally come in this secondary market. LSF intends to hold all purchased policies to maturity and not sell them on the secondary market.
Life settlement brokers typically buy policies from policyowners and resell them in secondary markets to other brokers or specialty portfolios for a profit. A policy may go through two or three sets of hands before it finds a home. The result is that the individual insured’s medical and often financial information is being shopped multiple times to numerous brokers on the internet before the policy ends up in the hands of a consolidator who holds the policy to maturity. Reported abuses and fraud have generally come in this secondary market. LSF intends to hold all purchased policies to maturity and not sell them on the secondary market.
