Why are universal life policies more attractive from a life settlement perspective than other types of life insurance?
Universal life insurance policies generally do not have fixed premium payment requirements, so it is possible to pay more or less than the scheduled amount shown in the “in force” illustrations used by life settlement providers to evaluate each policy. For this reason, the ability of life settlement providers to pay more for this type of insurance relative to the cash surrender value of the policy is often greater. In addition, since the introduction of this type of policy in the 1980s, this form of life insurance has become extremely common and widely available, so that many of these policies are now being offered for sale in the life settlement market.
