Life Settlement Alliance (Life Insurance Alliance)

In a life insurance settlement transaction, a settlement company purchases a life insurance policy from the original owner of the policy. The owner of the policy has the right to transfer the policy as long as the insured individual is without a terminal illness. Therefore, as long as the insured individual stays healthy, the life settlement company, then, is required to pay the ongoing premiums of the policy.

To diversify the risk of buying just one policy-and alone being responsible for the potential ongoing premiums, a life settlement alliance-also known as a life insurance alliance-is formed. The life settlement alliance is a group of companies that combine their funds in order to purchase a stake in more life insurance policies. A life insurance alliance allows companies to further diversify the risk that exists when buying just one policy.

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