Insurers do not participate in life settlements, but buyers use a structured financial analysis to calculate offers for a policy. They evaluate the insured’s life expectancy using medical records and actuarial data. They project premium payments required to keep the policy active over time. They then compare these costs with the guaranteed death benefit to determine whether the investment makes sense.
Buyers also consider the policy’s type, structure, age, carrier rating, and any loans or adjustments that affect long-term performance. Offers reflect the balance between future premium costs and the expected timing of the death benefit. A shorter expected timeline and lower premiums typically result in higher offers, while longer timelines or expensive premiums reduce value. Multiple buyers reviewing a policy can help increase the final offer because each uses slightly different pricing models and assumptions. The combination of these financial evaluations determines the final settlement value.
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