People have had the right to sell their life insurance policies for over a century, but the collapse of the mortgage market and subsequent economic decline drove Wall Street investors in search of new, alternative investments to supplement existing portfolios. The life settlement industry has grown into a $20 billion marketplace that is predicted to continue to grow.
Pacific West Capital Group has claimed a share of the life settlements market by limiting its client base to California investors with at least $20,000 available to invest. Qualified investors can invest in one policy or in several policies. Life settlements are regulated by the Securities Division of the California Department of Corporations.
Life insurance policies are chosen by Pacific West Capital Group using strict criteria to reduce risk. Only Universal Life policies from Standard & Poor’s A-rated or better insurance companies, are considered for purchase. The insured must be at least 75 years of age with documented chronic or degenerative health issues. Although exact predictions cannot be made about life expectancy of a particular individual, life settlement investments have provided investors with returns of approximately 12 to 14 percent over the past 15 years, according to industry averages.
Investors with Pacific West Capital Group can take advantage of an investment opportunity that was previously available only to large institutional investors and private individuals with sufficient capital to allow them to pay a policy owner the full market value of the policy. Now, smaller investors can acquire a fractional interest in a policy for as little as $20,000.
One factor making life settlements a preferred alternative investment vehicle for investors is their ability to avoid the influences of interest rate fluctuations, oil and gas prices, and the volatilities of the stock, bond and commodities markets. Investors seeking diversification in their portfolios without fear of direct influence typical economic conditions have made life settlements a popular investment choice.
Standard IRA and 401(k) accounts can be used to fund the purchase of life settlement investments.
The process created by Pacific West Capital Group for investors includes independent escrow agents to handle the money from all transactions, including the death benefit payment, and the creation of a trust to take ownership of the policies. This process offers investors the security of knowing that all transactions are completely independent of Pacific West Capital Group. Investors can focus on their investments without worrying about the financial strength and viability of Pacific West Capital.
Policies are purchased by PWCG Trust and administered by a trustee. Death benefits are paid to the trustee through an escrow agent who then makes distributions to investors. This process makes it possible for life settlements to be part of an IRA investment created through a third-party administrator.