Fostering Financial Independence for Seniors with Life Settlements
Financial Services Review Recognizes AIR Asset Management as a Top 10 SRI Advisor in 2024
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Life settlement investing offers a dual advantage: it allows for portfolio diversification for investors and converts an underutilized asset—life insurance—into a significant financial resource for seniors. Recognizing that many seniors hold potential value in life insurance policies, life settlements are a compelling strategy to tap into this value. This process not only bolsters investor portfolios with returns that have little correlation with market fluctuations but also channels crucial funds to seniors, aiding in covering healthcare costs, retirement, and enhancing overall quality of life. It's a proactive step towards securing the financial independence of the senior population.
AIR Asset Management is a significant investor in the life settlement market, a niche yet growing sector dedicated to procuring insurance policies that could significantly improve the financial stability of the elderly or those in need. The firm focuses on alternative investment avenues, such as life settlements to positively impact the often-overlooked senior segment of the U.S. population by providing liquidity and enhancing fiscal wellness.
“Our asset class inherently promotes social responsibility by providing seniors with capital while seeking to deliver
uncorrelated returns for investors.”
The firm’s multi-strategy approach presents an attractive opportunity for investors seeking diversification in their portfolios, as the returns are driven by mortality, having no correlation to the broader stock market. As a committed signatory of the Principles for Responsible Investment (PRI), AIR Asset Management focuses on ethical and judicious investment practices, recognizing the broader societal impacts of its investment decisions. It prioritizes social responsibility, emphasizing the importance of addressing genuine needs surrounding senior financial well-being and independence.
“Our asset class inherently promotes social responsibility by providing seniors with capital while seeking to deliver uncorrelated returns for investors,” says Richard Beleutz, Founder and CEO of AIR Asset Management. Life settlement providers collaborating with AIR Asset Management offer seniors much-needed liquidity and financial relief for individuals in times of crisis, usually amounting to four to seven times the cash surrender value of the policy. This can prove to be a life-changing amount of money for many of them.
An illustrative scenario exemplifies how life settlement investments can provide essential financial support to seniors during their lifetime. It involves a 72-year-old client who owned an $896,450 universal life policy while dealing with multiple health challenges. Struggling with premium payments and facing declining cash surrender value, they sought help from a life settlement provider. The client eventually received a settlement offer of $200,000—more than double the cash surrender value—providing crucial financial support for daily living and medical expenses.
Another compelling example demonstrates the effectiveness of life settlements in easing the financial strain of premium payments. A family with four adult children—who owned a $1,000,000 life insurance policy on their 74-year-old mother—faced the risk of policy lapse due to the absence of cash surrender value and high premiums. They sought advice from their financial advisor, who recommended selling the policy. Assisted by a reputable life settlement provider, they secured an offer of $180,000, providing each owner $45,000.
Life settlements entail monthly premiums, while structured settlements and private credit offer consistent monthly income streams. These initiatives play a pivotal role in addressing critical social issues, particularly senior financial independence, a cornerstone of environmental, social, and governance (ESG) considerations. Additionally, to bolster financial self-sufficiency, some life settlement providers propose senior care benefit plans. These plans allow for the allocation of funds towards longer care and funeral costs, with the benefit of tax-free disbursements to beneficiaries.
AIR Asset Management’s Competitive Edge
Whether as a hedge fund purchasing policies in the secondary market or providing liquidity to other investors in the tertiary market, AIR Asset Management plays a crucial role in sustaining this industry's ecosystem as a market participant.
The firm prioritizes acquisition prices and market liquidity in pursuit of efficient asset management. Its ability to swiftly execute transactions from their network of sellers, source policies directly from the consumers and their financial advisors and even sell them in the broader market opportunistically gives them a competitive edge.
AIR Asset Management's capabilities result from its exceptionally skilled team, composed of professionals with extensive financial services, asset management, and insurance backgrounds. The team, marked by its opportunistic approach, nurtures close relationships with insurance brokers and providers, enabling fast execution and strategic advantages in asset acquisition and disposal. They are also instrumental in pushing the firm to the forefront of socially responsible investing that imparts seniors dignity and peace of mind.
A Vanguard of Compassionate Investment
AIR Asset Management caters to a varied investor types. While some view the asset classes as a way to achieve stable, risk-adjusted returns in their portfolios, others, especially affluent or institutional investors, are drawn to the societal contributions of their investments.
AIR Asset Management is a beacon of change in a world where financial gains increasingly overshadow sustainable investing concerns. Through its socially responsible investment approach, it is instrumental in delivering financial prosperity and fostering positive societal impact, transforming the lives of seniors through greater financial independence.
AIR Asset Management (“AIR”) was selected by the Financial Services Review evaluation panel following a decision model that combines a standard MCDA (Multiple-Criteria Decision Analysis) method with peer recommendation. Details on the selection process can be provided upon request. AIR did not pay Financial Services Review for the award. However, AIR did pay Financial Services Review for Printing and Digital Rights for reprints for the “Top 10 SRI Advisors 2024” of Financial Review Magazine.