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Life insurance as an investment.

Life insurance is personal property that can be bought and sold like any other asset. With $19.6 trillion in-force coverage outstanding , life insurance is a huge asset class with minimal investment penetration.

Investing in life insurance policies offers an investment opportunity with outsized returns for a low risk profile. What distinguishes and investment in life insurance policies – lack of correlation to traditional markets. The real driver of the investment is mortality, not general economic movements. Stocks and bonds can move up and down, big moves or small moves, but trends in mortality move incrementally over long periods of time.

With a certain future payment known at the time of investment, and excellent underlying credit characteristics, life insurance policies offer an attractive investment opportunity.

What is a life settlement?

 

A life settlement is the sale of an existing life insurance policy to a third-party for more than its cash surrender value but less than its face value.

In a life settlement transaction, a specialty finance company (known as a Provider), on behalf of an investor, purchases a life insurance policy from the current owner-in most states the Provider is regulated by the state insurance department. Over the past five years, over $30 billions of life insurance policies have been sold in life settlement transactions.

What is Q Life Fund?

 

Q Life Fund I LP

Q Life Fund I LP is an independent fund sponsored by Q Capital Holdings LLC with the sole objective of aggregating a diversified, balanced portfolio of life insurance policies. Q Life Fund will purchase these policies through life settlement transactions.

Fund Manager: Q Fund Management LLC

The Fund will rely on the Fund Manager’s expertise to guide the purchasing criteria and investment analysis. The Fund Manager has industry leading experts who know how to buy policies efficiently and effectively and maximize portfolio investment returns. The Fund Manager will be responsible for all operational decisions related to the Fund and will work closely with its partners to continually monitor investment opportunities and Fund performance.

How does Q Life Fund manage policies?

Life Settlement Investors Wheel

Q Life Fund will aggregate a diversified pool of life insurance policies through life settlement transactions, targeting a net return of 10%-12% per annum.

Fund Strategy

The Fund’s core strategy is to buy and hold policies until maturity, but the Fund Manager will actively manage the investment portfolio and analyze potential trading opportunities.

The general policy characteristics comprise the following:

  • U.S. life insurance policies in force at least two years
  • Universal life, survivorship, convertible term, and whole life policies considered
  • Minimum insured age of 60
  • Minimum insurance company rating of A- (or equivalent) for 95% of the portfolio’s face value
  • Life expectancy average of 7 to 9 years, with a range of 2 to 15 years
  • Face value range from US$100,000 to US$10,000,000

Why is a life settlement fund  good strategy?

Diversification

A fund provides predictable returns by mitigating risks inherent in the life settlement market.

  • Number of Policies and Insureds Targeted minimum of 100 insureds
  • Insurance Companies No single company comprises more than 20% of the total face value of the portfolio
  • Health Impairment Categories Ample diversification factors
  • Range of Life Expectancies Ensures distribution of cash flows
  • Investment Characteristics
  • Attractive Returns High targeted risk-adjusted investment returns
  • Low Correlation Asset Life settlements, when held to maturity, are not correlated to general market or economic conditions
  • Predictable Cash Flows When a large, diversified portfolio of life settlements is aggregated, the cash flows become very predictable
  • Low Credit Risk The ultimate credit risk relates to an insurance company’s ability to pay claims-there is no historical precedent for non-payment
  • Pooled Assets No matter what the investment amount, investors benefit from the diversification inherent in exposure to a pool of policies without the financial commitment required to do so independently
  • Exposure to a New and Growing Market A well constructed portfolio of life settlements can provide an attractive risk adjusted reutn over the long-term

Quick Fact

Over the past five years, over $30 billion of life insurance policies have been sold in life settlement transactions.

Contact Q Capital today and learn more about the unique Q Life Fund opportunity.

Q Life Fund GP LLC, the General Partner of Q Life Fund I LP


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