Apparently third party purchasers depended upon credit in order to finance life settlements, and as credit got tight, sales declined by 20%. Meanwhile, the S&P 500 stock market index has declined by almost 40%. Many retirees depended upon market investments for income, so now the life settlement market has more sellers than buyers, and buyers are pickier about which policies they will purchase.

In the past, a healthy 65 year old could sell a large policy, even though the purchaser would not expect to collect the death benefit for 15 to 20 years. But morbid as it is to consider, polices from older people with shorter life expectancies will be more profitable for the buyers.

Life expectancies affect the life settlement market as much as the economy does. Many underwriters have increased their life expectancy calculations over the last few years, which means that possible purchasers may be even less likely to offer a settlement to younger retirees.