#1 - Senior Life Settlement Anatomy 101
A leader in the Senior Life Settlement market, Capstone Alternative Strategies specializes in making hard, easy when it comes to participating in this asset class. In an effort to build more awareness, we thought it would be helpful to create a series of short educational blogs to tell the Senior Life Settlement story from the beginning.
In the 1911 case of Grigsby vs. Russell, US Supreme Court Chief Justice Oliver Wendell Holmes ruled that life insurance is the legal property of the insured and is freely transferable at the will of the owner.
Wrote Holmes, “Life insurance has become in our days one of the best recognized forms of investment and self-compelled saving.”
This opinion placed the ownership rights in a life insurance policy on the same legal footing as more traditional investment property such as stocks and bonds. As with these other types of property, a life insurance policy could be transferred to another person at the discretion of the policy owner.
The secondary or Senior Life Settlement market has disrupted the monopsony that insurance companies once possessed. Until this market emerged, life insurance companies had absolute pricing power over the insured as they alone set the surrender offers to their insureds. This new source of liquidity for seniors has proven to be quite significant.
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