Past performance is not indicative of future results. Before investing, you should consult your trusted financial, accounting and legal advisors.
The Premium Reserve Management (PRM) data and associated projections herein do not represent an offer to buy or sell securities.
Senior Life Settlements are typically a buy and hold investment until contracts mature. There is an active secondary and tertiary market if it becomes necessary or desirable to sell one or more of your contracts prior to maturity. Capstone Alternative Strategies and/or its subsidiaries will, on a best efforts basis, assist with any contract disposition at the owner’s request. Please consider your liquid capital requirements carefully before investing.
All projections contained herein are gross calculations with no consideration given for taxation. Please consult your accounting and tax counsel before investing.
Capstone Alternative Strategies, the Capstone companies, Principals and representatives do not dispense legal, accounting or tax advice. Please consult your trusted counsel.
Life Expectancy Assessment:
The primary risk of owning Senior Life Settlements is time. Independent, accredited mortality assessment specialist medical underwriting firms estimate the projected holding period to maturity of a Senior Life Settlement contract by virtue of a medical underwriting appraisal of the insured’s expected life span. Life Expectancy assessments, of course, are not guaranteed, as exact human mortality is incalculable. Generally, based on proprietary underwriting methodologies, medical examiners approach the task by applying actual mortality experience of specific health impairments derived from large sample sizes of medical data to each individual case to arrive at the projected Life Expectancy assessment.
More specifically, a medical examiner applies debits and credits (increases or decreases to expected mortality) of an insured’s specific medical impairments to The Valuation Basic Tables (The VBT is a broad assumption based on societal mortality trends and is often referred to more commonly as the “Mortality Tables”). The Life Expectancy assessment is the net result of this discounting methodology of an individual insured’s age, sex and specific health conditions or impairments to the VBT. As it applies to a Senior Life Settlement contract, the mortality assessment returns a mean (average) result stated as the projected number of months an individual is expected to live.
To remediate the risk that a particular mortality assessment is grossly miscalculated, Capstone establishes the Life Expectancy estimation of a Senior Life Settlement contract by taking an average of three different, independently produced assessments.
The Expected Cash Flows from SLS Maturities projections provided herein were derived from multiple, independent data sources (Empirical Study of Life Settlement – London Business School, A.M. Best Methodology – Life Settlement Securitization and Projected to Actual Mortality statistics as published by specialist life expectancy medical underwriting firms Andersen Consulting, LLC and Convergence Medical Underwriting, LLC) based on large sample sizes of data representative of projected versus actual mortality experience. The expected cash flows are not guaranteed as human mortality is incalculable. Smaller (fewer contracts) portfolios of Senior Life Settlements and the real mortality experience within may vary more widely from the Expected Cash Flows from SLS maturities due to the sample size of the data.
Documents referenced herein are proprietary and available through Capstone Alternative Strategies. References were made to separate documents within the Capstone Alternative Strategies Premium Reserve Management (PRM) White Paper. The above-referenced documents are available upon request.