Alternative investments are becoming increasingly popular as people seek to diversify their portfolios and life settlements, are emerging in the alternative investment arena. But what are they, and should you invest in them? And what type of product is better suited for you and where do you find it?

Alternative investments are usually defined as anything other than stocks, bonds, and cash. Among alternatives such as hedge funds, venture capital, private equity, real estate, commodities, life settlements are beginning to stand out, especially in periods of volatility and uncertainty. These investments have been well-liked by institutional or high net worth investors and are starting to make their way into the portfolios of retail investors.

Life Investors Management Company, LP (LIMC) is a boutique life settlement company specializing in life settlement investments through private offerings ranging from five million dollars tailored to their friends and family network up to thirty million geared toward the broker-dealer and advisor platforms. They are located in Southlake, Texas and have proven to provide generous returns to their investors over their fifteen years plus of operation.

Before making any decisions, it is important to understand the advantages and disadvantages of life settlement investments. Let us look at some of the pros and cons:

Pros of Life Settlements


As we know diversification is the key to any sound investment portfolio, and life settlements can help achieve that. By including this asset class in your portfolio, you can further diversify and reduce overall risk. This means that if one asset class takes a hit, a portfolio as a whole will be less affected. In addition, within the life settlement investment, investing in unitized offerings such as LIMC offers, creates further diversification by spreading the investment dollars over a larger number of insured. The more insured in your portfolio, the greater the diversification.

Higher Returns

Another advantage of life settlements is that they have the potential to generate higher returns than traditional assets. This is partially because they are uncorrelated to most all other markets, and do not feel the impact associated with market fluctuations. Life Settlement managers vary in their fund models and operational cost. LIMC has proven to provide healthy returns due to managing their costs and policy purchasing process.

The Uncorrelated Characteristic

The stock market is always fluctuating, there are cyclical real estate bubbles, the oil and gas business usually revolves around political administrations, the economic management of the markets create swings in interest rates and inflation. It can be difficult to predict what will happen next. As an alternative, life settlement investments do not correlate with the above-mentioned markets and indicators. Life settlement investments are not affected by the changing markets. This non-correlation can help to diversify a portfolio and protect it from market volatility.


Some alternative investments are more certain than others. There are real estate crashes, dry holes in the oil field, or changing economic times that affect high yielding loan portfolio investments. With a life settlement investment, there is a certainty in that you as an investor will receive the designated death benefit associated with your investment. The only variable is when. When will the insured settle?


One aspect of a life settlement investment with LIMC is transparency. These are simple and straightforward transactions. As an investor, you have access to ALL information associated with the investment at any time. You will constantly know where you stand and can evaluate your potential risk and return.

Cons of Alternative Investments

Less Liquidity

One of the biggest disadvantages of alternative investments including life settlements is that they tend to be less liquid than traditional assets. This means it can be more difficult and time-consuming to sell your investment and get your money out. When it comes to stocks or bonds, you can usually sell them quickly and get your money within a few days.

No Tax Advantage

Another downside of alternative investments is that the income earned from life settlements if taxed as ordinary income. Returns, such as produced by LIMC, tend to be higher than traditional investments which help offset the taxable application. Investors may elect to use their IRA in a life settlement investment.

Tend to be Capital Growth Oriented

If you are looking for a quarterly dividend, life settlements may not be the option for you. Life settlements tend to be better suited for investors seeking higher yielding capital growth strategies. If you are participating in an investment such as those offered by LIMC, you will not receive a set return or dividend. However, you will receive settlement distributions from settled policies as they settle which may be as often as annually depending on the structure of your investment offering.

Not Suitable for Everyone

Alternative investments are not suitable for everyone. If you are risk-averse or do not have a lot of money to invest, then these types of investments may not be right for you.

Before investing in any type of asset, it is important to understand your risk tolerance and financial goals. In addition, these types of investments require more research and prior knowledge to make informed decisions. The team at LIMC can help you to understand the risk and rewards associated with life settlements and assist in tailoring the perfect portfolio of this diverse, high yielding alternative.


Overall, life settlements can be a wonderful way to diversify your portfolio and potentially generate higher returns. However, it is important to understand the risks involved before making any decisions. These types of investments may not be suitable for everyone and come with less liquidity. It is important to research and produce a well-informed investment plan before moving forward.

LIMC has a proven history in the life settlement investment industry.  If you are interested in learning more about life settlements and making this asset class part of your investment portfolio or if you are an Advisor looking to add this alternative to your platform, please contact their office in Southlake, Texas at 817-575-9553 or