Life settlements let qualified investors buy existing life insurance policies from people who no longer need them. You can fund your purchase with after-tax dollars or through a self-directed IRA. Learn how it works, what it costs, and the real risks, then decide if it fits your portfolio.
Life settlements are speculative, illiquid, and involve risk, including loss of principal. Returns and timing are not guaranteed. For qualified investors only. See Risk Disclosures below.
An educational overview. Every benefit below comes with trade-offs, which are covered in the risk section.
A life settlement's payout depends on when the insured person passes away and on the insurance carrier paying the claim. It doesn't depend on interest rates, earnings reports, or the S&P 500. That's why pension funds and other institutional investors have used life settlements as a diversifier for decades. "Non-correlated" doesn't mean "no risk." Life settlements carry their own risks, listed below.
Every policy has a stated face value (death benefit), paid by the insurance carrier to the policy owner when it matures. Each policy is priced using the insured's estimated life expectancy. The amount is fixed. When you receive it is not. If the insured lives longer than estimated, you pay premiums longer and your annualized result goes down.
Your trust, LLC, or IRA-LLC becomes the policy's owner and beneficiary of record with the carrier. Before you buy, you get policy-level information to review, such as face value, carrier, and premium structure, after signing a non-disclosure agreement. After you buy, you track the policy, premiums, and documents in an online servicing portal.
Fund your purchase through a self-directed IRA (including rollovers from old 401(k), 403(b), and 457 plans) set up as an IRA-LLC, or with after-tax money held personally or in a trust or LLC.
From first conversation to policy ownership.
Two ways to fund a purchase. Your CPA and attorney should help you choose.
| Self-Directed IRA (IRA-LLC) | After-Tax Dollars | |
|---|---|---|
| Money source | Traditional IRA, Roth IRA, or rollover from an old 401(k)/403(b)/457 | Personal savings, brokerage cash, CDs, or a trust or LLC account |
| Who owns the policy | Your IRA-LLC | You, or (recommended) your trust or LLC |
| Set-up | Self-directed IRA custodian plus an LLC owned by the IRA | Set up the trust or LLC (if used) and fund its account |
| Typical costs | Custodian and LLC fees. FFS materials show $1,180 in year 1 and $435 per year after (IRA Club and Illinois LLC). Confirm current fees. | Entity formation and maintenance costs, if any. Ask for a full cost schedule. |
| Premium payments | Paid from IRA-LLC funds. Your IRA needs enough cash to cover premiums for years. | Paid from your entity or personal funds |
| Taxes | Tax treatment follows IRA rules. Watch prohibited-transaction rules and possible UBTI/UDFI issues. Ask your CPA. | Gain may be taxable when received. Character and timing depend on your situation. Ask your CPA. |
| Best for | Investors with retirement funds who want to diversify inside a tax-advantaged account | Investors with non-retirement cash who want direct control |
Neither Team Invest Pro, LLC, Chris McIntosh, nor FFS gives tax or legal advice. Talk to your CPA and attorney before choosing a structure.
A life settlement is the sale of an existing life insurance policy by the insured to a third party for more than the policy's cash surrender value. The buyer takes over premium payments and receives the death benefit when the policy matures.
Usually older adults whose needs have changed. Their premiums may have become unaffordable, the policy may no longer be needed for estate planning, or they want cash now. A life settlement often pays them more than surrendering the policy or letting it lapse.
The investor buys the policy for less than its face value, pays the ongoing premiums, and receives the face value at maturity. Result = death benefit − (purchase price + premiums paid). Returns are not guaranteed, the timing is uncertain, and you can lose money.
Nobody knows for certain. Each policy is priced on an estimated life expectancy, but the actual timing can be shorter or much longer. You should be prepared to hold the policy, and keep paying premiums, well past the estimate.
FFS materials state a minimum net worth of $250,000, with a maximum 10% allocation for investors whose net worth is under $1 million. Accredited-investor status and other suitability requirements may also apply; these will be confirmed with you before any investment discussion.
Yes, through a self-directed IRA set up as an IRA-LLC. Custodian and LLC fees apply. Rollovers from old 401(k), 403(b), and 457 plans may also be possible.
Plan on holding to maturity. There may be no ready buyer, and a sale before maturity, if possible at all, could be at a loss.
Policy premiums as the servicer directs, servicing fees, and (for the IRA path) custodian and LLC fees. Ask for a full cost schedule before you invest.
FFS's admin team and servicer send the purchase documents and carrier change forms and track the policy. You sign electronically and can check status in the online portal.
Chris McIntosh, through Team Invest Pro, LLC, is an independent marketer. Chris educates investors and introduces qualified people to Orlando Garcia-Ruiz at Freedom Financial Strategies. Team Invest Pro, LLC does not give investment, tax, or legal advice. [Compensation disclosure per counsel] [Registration status statement per counsel]
Life settlement investments are often treated as securities under federal and state law. Read all offering documents and risk disclosures, and talk to your own advisors.
This page is for educational purposes only. It is not an offer to sell or a solicitation of an offer to buy any security or investment, and it is not investment, tax, or legal advice. Any offer will be made only through official offering or purchase documents, and only where permitted by law. Life settlement investments are speculative and involve substantial risk, including possible loss of all money invested. Key risks include:
Returns and timing are not guaranteed. Past results don't predict future results. Investments may be limited to investors who meet suitability and/or accredited-investor requirements. Chris McIntosh and Team Invest Pro, LLC are independent marketers and are not employees of Freedom Financial Strategies. [Compensation and registration disclosure per counsel] Consult your own financial, tax, and legal advisors before investing.
Start with a short, no-obligation educational call with Chris McIntosh of Team Invest Pro, LLC.
Life settlements let qualified investors buy existing life insurance policies from people who no longer need them. You can fund your purchase with after-tax dollars or through a self-directed IRA. Learn how it works, what it costs, and the real risks, then decide if it fits your portfolio.
Life settlements are speculative, illiquid, and involve risk, including loss of principal. Returns and timing are not guaranteed. For qualified investors only. See Risk Disclosures below.
An educational overview. Every benefit below comes with trade-offs, which are covered in the risk section.
A life settlement's payout depends on when the insured person passes away and on the insurance carrier paying the claim. It doesn't depend on interest rates, earnings reports, or the S&P 500. That's why pension funds and other institutional investors have used life settlements as a diversifier for decades. "Non-correlated" doesn't mean "no risk." Life settlements carry their own risks, listed below.
Every policy has a stated face value (death benefit), paid by the insurance carrier to the policy owner when it matures. Each policy is priced using the insured's estimated life expectancy. The amount is fixed. When you receive it is not. If the insured lives longer than estimated, you pay premiums longer and your annualized result goes down.
Your trust, LLC, or IRA-LLC becomes the policy's owner and beneficiary of record with the carrier. Before you buy, you get policy-level information to review, such as face value, carrier, and premium structure, after signing a non-disclosure agreement. After you buy, you track the policy, premiums, and documents in an online servicing portal.
Fund your purchase through a self-directed IRA (including rollovers from old 401(k), 403(b), and 457 plans) set up as an IRA-LLC, or with after-tax money held personally or in a trust or LLC.
From first conversation to policy ownership.
Two ways to fund a purchase. Your CPA and attorney should help you choose.
| Self-Directed IRA (IRA-LLC) | After-Tax Dollars | |
|---|---|---|
| Money source | Traditional IRA, Roth IRA, or rollover from an old 401(k)/403(b)/457 | Personal savings, brokerage cash, CDs, or a trust or LLC account |
| Who owns the policy | Your IRA-LLC | You, or (recommended) your trust or LLC |
| Set-up | Self-directed IRA custodian plus an LLC owned by the IRA | Set up the trust or LLC (if used) and fund its account |
| Typical costs | Custodian and LLC fees. FFS materials show $1,180 in year 1 and $435 per year after (IRA Club and Illinois LLC). Confirm current fees. | Entity formation and maintenance costs, if any. Ask for a full cost schedule. |
| Premium payments | Paid from IRA-LLC funds. Your IRA needs enough cash to cover premiums for years. | Paid from your entity or personal funds |
| Taxes | Tax treatment follows IRA rules. Watch prohibited-transaction rules and possible UBTI/UDFI issues. Ask your CPA. | Gain may be taxable when received. Character and timing depend on your situation. Ask your CPA. |
| Best for | Investors with retirement funds who want to diversify inside a tax-advantaged account | Investors with non-retirement cash who want direct control |
Neither Team Invest Pro, LLC, Chris McIntosh, nor FFS gives tax or legal advice. Talk to your CPA and attorney before choosing a structure.
A life settlement is the sale of an existing life insurance policy by the insured to a third party for more than the policy's cash surrender value. The buyer takes over premium payments and receives the death benefit when the policy matures.
Usually older adults whose needs have changed. Their premiums may have become unaffordable, the policy may no longer be needed for estate planning, or they want cash now. A life settlement often pays them more than surrendering the policy or letting it lapse.
The investor buys the policy for less than its face value, pays the ongoing premiums, and receives the face value at maturity. Result = death benefit − (purchase price + premiums paid). Returns are not guaranteed, the timing is uncertain, and you can lose money.
Nobody knows for certain. Each policy is priced on an estimated life expectancy, but the actual timing can be shorter or much longer. You should be prepared to hold the policy, and keep paying premiums, well past the estimate.
FFS materials state a minimum net worth of $250,000, with a maximum 10% allocation for investors whose net worth is under $1 million. Accredited-investor status and other suitability requirements may also apply; these will be confirmed with you before any investment discussion.
Yes, through a self-directed IRA set up as an IRA-LLC. Custodian and LLC fees apply. Rollovers from old 401(k), 403(b), and 457 plans may also be possible.
Plan on holding to maturity. There may be no ready buyer, and a sale before maturity, if possible at all, could be at a loss.
Policy premiums as the servicer directs, servicing fees, and (for the IRA path) custodian and LLC fees. Ask for a full cost schedule before you invest.
FFS's admin team and servicer send the purchase documents and carrier change forms and track the policy. You sign electronically and can check status in the online portal.
Chris McIntosh, through Team Invest Pro, LLC, is an independent marketer. Chris educates investors and introduces qualified people to Orlando Garcia-Ruiz at Freedom Financial Strategies. Team Invest Pro, LLC does not give investment, tax, or legal advice. [Compensation disclosure per counsel] [Registration status statement per counsel]
Life settlement investments are often treated as securities under federal and state law. Read all offering documents and risk disclosures, and talk to your own advisors.
This page is for educational purposes only. It is not an offer to sell or a solicitation of an offer to buy any security or investment, and it is not investment, tax, or legal advice. Any offer will be made only through official offering or purchase documents, and only where permitted by law. Life settlement investments are speculative and involve substantial risk, including possible loss of all money invested. Key risks include:
Returns and timing are not guaranteed. Past results don't predict future results. Investments may be limited to investors who meet suitability and/or accredited-investor requirements. Chris McIntosh and Team Invest Pro, LLC are independent marketers and are not employees of Freedom Financial Strategies. [Compensation and registration disclosure per counsel] Consult your own financial, tax, and legal advisors before investing.
Start with a short, no-obligation educational call with Chris McIntosh of Team Invest Pro, LLC.