The U.S. life settlement market is poised for long-term expansion extending through 2035 as investor demand for low-correlated alternative assets converges with an aging population, growing retirement and long-term care funding needs, and broader direct-to-consumer awareness, a new study by investment management consultancy Conning has revealed.
The study provides Conning’s analysis of the 2025 life settlement market, including its key drivers, alongside projections regarding annual settlement volume and gross market potential extending through 2035.
Conning’s research underscores that life settlements continue to remain attractive to investors pursuing differentiated sources of return with low correlation to conventional financial markets
The firm also notes that higher insurer portfolio yields may facilitate enhanced universal life crediting rates and premium optimisation strategies.
In addition, Conning underscored that on the consumer side, the expanding elderly population in the United States and escalating long-term care costs, may progressively encourage more policyholders to evaluate life settlements as a viable option in lieu of policy lapse or surrender.
Scott Hawkins, the Head of Insurance Research at Conning and author of the study, commented: “The long-term forces supporting the life settlement market remain favorable, but the path to growth is becoming more complex.
“Market participants will need to expand consumer access while carefully managing policy supply, insurer exposure, financing, and emerging longevity risks.”
Throughout recent years, the market for life settlement investments has been steadily growing and some of the established insurance-linked securities (ILS) investment managers we report on allocate to life settlements within their life ILS fund strategies.
Some ILS funds invest in life settlement transactions and there are also specialist investment managers with dedicated life settlement strategies, which are typically backed by institutional investor clients including pension funds and family offices. In addition, this insurance-linked asset class market sees specialist firms act as advisors and assist in originating policies for these investors and dedicated fund strategies.
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