How US Life Insurance Contracts Support Social Impact and Financial Return

How Insurance Contracts Deliver Both Financial Stability and Social Responsibility

Insurance contracts, often overlooked as financial assets, are increasingly recognized for their dual role: providing non-correlated performance for portfolios while also supporting fairness and empowerment for policyholders. This combination makes the asset class distinctive — one where purpose and performance naturally align.

Unlocking Value for Policyholders

For many seniors, life insurance policies represent one of their largest personal assets. Historically, if those policies were no longer needed, the only option was to surrender them back to the insurer — often for just a fraction of their value.

Today, structured secondary markets allow these contracts to be sold at fair market prices, giving policyholders immediate financial flexibility. The proceeds are frequently used for healthcare costs, long-term living expenses, or retirement planning — turning an illiquid contract into meaningful support at a critical stage of life.

The Broader Social Benefits

This asset class provides measurable advantages beyond investment performance:

• Financial Empowerment – Policyholders can unlock value they previously had little access to.

• Consumer Choice – Transparent markets give families alternatives beyond surrendering policies at steep discounts.

• Estate Flexibility – Funds may be directed toward retirement needs, intergenerational wealth transfers, or charitable giving.

  
  

A Regulated and Established Industry

The secondary market for insurance contracts is regulated in the majority of U.S. states, with robust licensing requirements, disclosure rules, and consumer protections in place. These safeguards ensure that policyholders are treated fairly, transactions are transparent, and investors participate in a framework built on accountability and oversight. Far from being experimental, this is an established market with clear rules and professional standards.

Purpose Aligned with Performance

For financial professionals, allocations backed by insurance contracts provide steady, non-correlated returns within a fully institutional framework. For policyholders, they create financial dignity and flexibility. It is a rare alignment of outcomes — one that shows how responsible finance can deliver both portfolio stability and social impact.

Sources:

Wharton School Research on Life Settlements & Policyholder Value: https://lgst.wharton.upenn.edu


LISA (Life Insurance Settlement Association): https://www.lisa.org