Life Insurance Policies

12 Months Ended

Dec. 31, 2019

Investments, All Other Investments [Abstract]

As of December 31, 2019, the Trust owns an interest in 2,896 policies of which 483 are life settlement policies and 2,413 are viaticals. As of December 31, 2018, the Trust owned an interest in 3,037 policies of which 548 are life settlement policies and 2,489 are viaticals (the “PHT Portfolio”). The PHT Portfolio’s aggregate face value is $1.1 billion as of December 31, 2019 of which $938.2 million is attributable to life settlements and $191.3 million is attributable to viaticals. The PHT Portfolio’s aggregate face value is $1.3 billion as of December 31, 2018 of which $1.1 billion is attributable to life settlements and $203.1 million is attributable to viaticals. The PHT Portfolio’s aggregate fair value is $172.2 million as of December 31, 2019 of which $168.7 million is attributable to life settlements and $3.5 million is attributable to viaticals. The PHT Portfolio’s aggregate fair value was $186.3 million as of December 31, 2018 of which $182.0 million was attributable to life settlements and $4.3 million was attributable to viaticals.

Life expectancy reflects the probable number of years remaining in the life of a class of persons determined statistically, affected by such factors as heredity, physical condition, nutrition, and occupation. It is not an estimate or an indication of the actual expected maturity date or indication of the timing of expected cash flows from death benefits. See “Life Insurance policies,” in Note 6, “Fair Value Measurements”. The following table summarizes the Trust's life insurance policies grouped by remaining life expectancy as of:

December 31, 2019:


Remaining Life Expectancy (Years)	Number of Life Insurance Policies	Face Value		Fair Value
0-1	—	$	—	$	—
1-2	1	46,395		32,546
2-3	5	4,956,008		1,243,470
3-4	79	106,480,951		26,699,382
4-5	194	401,541,262		81,093,500
Thereafter	2,617	616,520,712		63,173,836
Total	2,896	1,129,545,328		172,242,734

December 31, 2018:


Remaining Life Expectancy (Years)	Number of Life Insurance Policies	Face Value		Fair Value
0-1	—	$	—	$	—
1-2	1	46,395		5,076
2-3	1	241,667		53,634
3-4	44	50,866,327		15,246,887
4-5	183	339,765,032		75,610,383
Thereafter	2,808	867,471,295		95,335,780
Total	3,037	$	1,258,390,716	$	186,251,760

Estimated premiums to be paid by the Trust for its portfolio during each of the five succeeding fiscal years and thereafter as of December 31, 2019, are as follows:


2020	$	63,074,892
2021	65,483,103
2022	61,597,800
2023	56,599,136
2024	49,116,216
Thereafter	186,761,906
Total	$	482,633,053

The amount of $482.6 million represents the estimated total future premiums payable by the Trust. The Trust is required to pay its portion to keep the life insurance policies in force during the life expectancies of all the underlying insured lives. The estimated total future premium payments could increase or decrease significantly to the extent that insurance carriers increase the cost of insurance on their issued policies or that actual mortalities of insureds differ from the estimated life expectancies. If the continuing fractional holders default on their future premium obligations, the Trust’s premium liability may increase.

The Trust anticipates funding the estimated premium payments from maturities of life insurance policies. It also maintains premium reserves and access to lines of credit.

- Definition

The entire disclosure for life settlement contracts including the accounting policy for life settlement contracts and the classification of cash receipts and cash disbursements in the statement of cash flows and, as applicable, for (1) life settlement contracts accounted for under the investment method based on the remaining life expectancy for each of the first five succeeding years from the date of the statement of financial position and thereafter, as well as in the aggregate: (a) the number of life settlement contracts, (b) the carrying value of the life settlement contracts, and (c) the face value (death benefits) of the life insurance policies underlying the contracts, (d) the life insurance premiums anticipated to be paid for each of the five succeeding fiscal years to keep the life settlement contracts in force as of the date of the most recent statement of financial position presented, (e) the nature of the information that causes the Entity to change its expectations on the timing of the realization of proceeds from the investments in life settlement contracts and the related effect on the timing of the realization of proceeds from the life settlement contracts and for (2) life settlement contracts accounted for under the fair value method, disclosure would include, based on remaining life expectancy for each of the first five succeeding years from the date of the statement of financial position and thereafter, as well as in the aggregate: (a) the number of life settlement contracts, (b) the carrying value of the life settlement contracts, (c) the face value (death benefits) of the life insurance policies underlying the contracts, (d) the reasons for changes in the Entity's expectation of the timing of the realization of the investments in life settlement contracts, and (e) (i) the gains or losses recognized during the period on investments sold during the period and (ii) the unrealized gains or losses recognized during the period on investments that are still held at the date of the statement of financial position.

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