Death Bond
Contents
Exploring Death Bonds: Understanding the Risks and Rewards
Deciphering Death Bonds
Dive into the world of death bonds, a unique form of asset-backed security (ABS) that derives from pooling transferable life insurance policies. Uncover the intricacies of how these bonds work, their origins, and the advantages and disadvantages they present to investors.
Unraveling the Mechanism of Death Bonds
Gain insight into how life settlement companies purchase existing life insurance policies and repackage them into investment products known as death bonds. Understand the correlation between the yield of death bonds and the longevity of the insured individuals.
Understanding Viatical Settlements
Explore the concept of viatical settlements, the foundation upon which death bonds are often built. Learn how terminally or chronically ill individuals sell their life insurance policies at a discount for immediate cash, and the implications of such transactions for investors.
Pros and Cons of Death Bonds
Examine the potential benefits and drawbacks of investing in death bonds, including diversification opportunities, tax advantages, and concerns related to modest returns and lack of regulation in the industry.