Yaniv Bertele on Why Life Settlements Are the Future of Alternative Investing — Authentic Press Network News | APN News
The institutional investment world is asking a billion-dollar question: Where can we find genuine diversification in an increasingly correlated market? As traditional portfolio models strain under the weight of rising interest rates and persistent volatility, a once-obscure asset class is capturing serious attention from sophisticated investors. Life settlements, the secondary market for life insurance policies, are emerging as a compelling answer to the diversification crisis facing modern portfolios.
Yaniv Bertele, founder of EverOak Innovations and a veteran of venture capital and insurtech innovation, has spent years studying the inefficiencies and opportunities within alternative asset classes. With intensive 5 years studying Theoretical Physics and Mathematics at the University of Gothenburg and experience managing corporate venture capital portfolios, Bertele brings an analytical rigor to understanding why life settlements represent what he calls “uncorrelated returns in a correlated world.”
The thesis is straightforward but powerful: life settlements offer institutional investors access to returns that move independently of traditional market cycles, backed by an increasingly robust regulatory framework and a growing recognition that this asset class addresses real consumer needs. For investors exhausted by the limitations of conventional alternatives, this market represents both opportunity and evolution.
Understanding the Uncorrelated Returns Advantage
At its core, a life settlement involves the sale of a life insurance policy by the original policyholder to a third-party investor for more than the cash surrender value but less than the death benefit. The investor assumes premium payments and receives the death benefit when the insured passes away. While this might sound unconventional, the mathematical foundation is remarkably stable: returns are driven by actuarial science and medical underwriting rather than market sentiment or economic cycles.
“It is an asset class that represents a very low correlation,”Bertele explains. “Reducing the volatility by introducing an asset class that has persistently low correlation to the capital markets, Sharpe ratios that are high and returns that are historically competitive with fixed income, assuming that you find that right candidate, you change that paradigm.”
This lack of correlation is not theoretical. Life settlements have demonstrated resilience through multiple market crises precisely because their performance drivers are fundamentally different. When equity markets crashed in 2008, life settlement returns remained stable. When bonds experienced historic volatility in 2022, life settlements continued generating predictable cash flows. The asset class operates on a timeline measured in human longevity, not quarterly earnings reports or Federal Reserve announcements.
For institutional investors, this translates into powerful portfolio construction benefits. Bertele’s firm conducted detailed analysis, substituting various percentages of traditional bond holdings with life settlements allocations. The results consistently showed improved risk-adjusted returns: portfolios demonstrated reduced standard deviation while maintaining or improving overall returns. The diversification benefit stems from genuine independence; life settlements simply don’t move in tandem with stocks, bonds, real estate, or even cryptocurrency.
The investment case extends beyond correlation statistics. Life settlements offer an illiquidity premium that rewards patient capital. Unlike publicly traded securities that demand daily liquidity, life settlement investors commit capital for multi-year periods, earning additional return for that patience. For pension funds, insurance companies, and endowments already structured for long-term thinking, this illiquidity premium represents value rather than constraint.
Portfolio diversification within the asset class itself adds another layer of risk management. Investors can spread exposure across multiple dimensions: age cohorts, gender, geographic location, policy sizes, and insurance carriers. This granular diversification helps smooth returns and reduce concentration risk, creating portfolios that behave more like diversified bond funds than individual equity positions.
Breaking Down Regulatory Maturity and Ethical Considerations
Perhaps the most significant evolution in life settlements has been the development of comprehensive regulatory frameworks that protect consumers while enabling institutional participation. This regulatory maturity addresses what has historically been the primary barrier to widespread adoption: concerns about transparency, fairness, and ethical implications.
“You have 43 states plus Puerto Rico that now regulate life settlements, covering ~90% of the U.S. population, which allows both consumer protection and transparency,” Bertele notes. These frameworks establish clear licensing requirements for brokers, define which policies are eligible for sale, mandate disclosure requirements, and create oversight mechanisms. The result is a structured market with defined rules, not a regulatory gray area.
The ethical dimension requires direct confrontation. Critics sometimes characterize life settlements as “betting on death,” a framing that Bertele argues fundamentally misunderstands both the product and financial markets more broadly.
“The misconception in the market is that life settlements are mortality-based incentives,” he explains. “This perspective fails to recognize that mortality-based financial products have been mainstream for centuries; pension funds, annuities, and even traditional life insurance, all incorporate mortality projections.”
The comparison is apt. Every pension fund calculation relies on actuarial tables projecting when beneficiaries will die. Every annuity pricing model incorporates longevity assumptions. Life insurance itself is explicitly structured around mortality risk. What makes life settlements different is transparency about this reality, not the underlying principle.
More importantly, life settlements serve genuine consumer needs. Many policyholders reach a stage where continuing premium payments no longer makes financial sense, children are grown, estates are planned differently, or financial circumstances have changed. The traditional options are limited: continue paying premiums that strain budgets, let the policy lapse and receive nothing, or accept a minimal cash surrender value from the insurance carrier. Life settlements offer a third option that is often five to seven times the cash surrender value on average in recent years, providing meaningful liquidity when seniors need it most.
Insurance companies themselves support the regulatory frameworks enabling life settlements, recognizing that providing policyholders with legitimate exit options serves the industry’s long-term credibility. Major institutional investors including pension funds and family offices, have steadily increased allocations, validating both the regulatory environment and the investment merit.
The Path Forward
The convergence of compelling returns, regulatory clarity, and ethical defensibility positions life settlements as a maturing alternative asset class ready for broader institutional adoption. For investors seeking genuine portfolio diversification, the asset class offers something increasingly rare: returns that actually behave differently from traditional holdings.
Yaniv Bertele envisions continued evolution in accessibility. Just as private equity and hedge funds once served only the ultra-wealthy but gradually became available through structured products, life settlements could follow a similar democratization path. The regulatory infrastructure now exists. The institutional adoption is accelerating. The next phase involves creating investment vehicles that make the asset class accessible beyond specialist investors.
For financial professionals advising institutional clients, the question is shifting from “Why consider life settlements?” to “What allocation makes sense?” Research suggests that even modest allocations, 5% to 10% of the traditional bond portion, can meaningfully improve portfolio characteristics. Larger allocations may be appropriate for investors specifically seeking alternative fixed income or those building truly future-proof portfolios designed to weather any market environment.
In 2023, LISA members purchased ~$4.67B of face value; over nine million policies (~$725B face) still lapse or are surrendered annually, evidence of a large, untapped opportunity.. As more institutions recognize the diversification benefits, regulatory comfort increases, and investment vehicles proliferate, this asset class seems poised for sustained growth. For investors willing to look beyond conventional alternatives, life settlements offer exactly what modern portfolios need: returns that genuinely don’t correlate with everything else.
Originally published at https://www.apnnews.com on November 18, 2025.
