Life settlement investments offered by Pacific West Capital Group do not react to the volatility of the stock or bond markets, interest rate fluctuations, instability of foreign economies or poor economic conditions in this country.
A primary area of risk that is of concern to life settlement investors is the financial strength and stability of the insurance companies that underwrote and must payout the policies at maturity. Another risk factor is contestability of the policies. Pacific West Capital Group has addressed each risk factor.
Policies under consideration for purchase by PWCG Trust must be from a life insurance company that is rated at least an “A” by Standard and Poor’s. Policies that are considered are usually from companies such as MetLife, New York Life or other well-known and highly regarded insurers. Investors know that the companies issuing the policies are stable and are chosen by Pacific West Capital Group with a view toward reducing investor risk.
Contestability is a method life insurance companies use to avoid paying the proceeds of the policy upon the death of the insured. Pacific West Capital carefully analyzes each policy and applies a set of guidelines to anticipate issues that could arise to make an insurance company challenge the validity of a policy.
For example, Pacific West Capital makes certain that policies under consideration for purchase are beyond contestability periods and that the suicide clause period, usually two years from the date the policy is issued, has passed.
Another example of how Pacific West Capital Reviews focuses on reducing risk concerning the mental capacity of the owner of the policy and the relinquishment of rights by the beneficiary. All policy owners must provide a statement from a physician stating that the policy owner is of sound mind and capable of entering into a binding contract for the sale of the policy.
Beneficiaries must sign a statement acknowledging that they are aware of the sale of the policy by the owner and acknowledge that they are giving up any rights, current or future, to the policy death benefit.
In order to offer investors life settlement investments with limited term risk, Pacific West Capital Group has developed strict criteria for the policies it selects. The insured must be at least 75 years old and suffering from chronic or degenerative medical conditions.
While no one can predict with any degree of certainty when a person will die, using criteria focused on age, health and lifestyle to select its policies to offer to investors helps to minimize term risk and provide the investor with a clear picture of the investment product.
Limiting risk, making full disclosure of key facts concerning the policy to the investor and using a trustee and independent escrow agent are just some of the ways that Pacific West Capital Group works to protect its life settlement investors.
Everything from the age and gender of the insured to the exact amount of the total fixed return that the investor can expect to receive is disclosed in writing at the beginning of the life settlement transaction.