Asked the No. 1 thing that advisors should know about these transactions, Maxson says, "I want them to understand that they have the potential to receive a multiple of the cash surrender value, if the policy has any, and that the purchasers of the policies are typically large, institutional investors."
In other words, these are not shady deals.
Going forward, there is cause for cautious optimism. "Barring some seismic event such as a change to federal laws that somehow make life settlements a household word, the market is going to continue with its incremental, organic growth," predicts Maxson.