Wall Street Firms Buy Life Policies for Death Benefits, Expanding a Legal Secondary Market
Updated
Updated · Yahoo Finance · Aug 23
Wall Street Firms Buy Life Policies for Death Benefits, Expanding a Legal Secondary Market
2 articles · Updated · Yahoo Finance · Aug 23
Summary
Life settlements let investors legally buy a policy from its owner, keep paying the premiums and collect the death benefit when the insured person dies.
That secondary market grew out of viatical settlements in the 1980s and 1990s, when AIDS patients sold policies for cash they urgently needed while still alive.
Scott Page, cited by NPR's Planet Money as an early participant, said the model emerged after he and his partner struggled to keep up premium payments during the epidemic.
As HIV treatments improved, viatical deals faded and were replaced by broader life-settlement businesses targeting older adults rather than terminally ill sellers.