our company hedges its memberships related income stream with Term Life Policies issued by major global insurer. I’d like to bring the following solution to our CFO if the community likes the idea:
the company would pledge Term Life Policies it owns as collateral (an API call into major insurer will confirm the policy is in good standing and that the borrower owns the policy, and the amount of the benefit) and expects 50% Loan-to-Value (70% of which would be locked up in escrow until the member has passed away, as evidenced by a Certified Death Certificate (the details would need to be anonymized)) under the following condition:
- the member connected to the policy has been declared terminally ill by two licensed MDs or DOs
This would create a credit facility worth a few million dollars in the next few years. Each drawdown would likely be outstanding around 9 to 18 months. In a decade this credit facility could easily be > USD 100 mln.
Looking forward to feedback.