How pricing is determined
Buyers decide what they're willing to pay for a policy in today’s dollars based on what they believe it will cost them to keep the policy in force until they collect the death benefit at some unknown future date. Will the total amount they spend to buy and then fund the policy enable them to realize an acceptable investment return?
The primary drivers of policy value are as follows:
Here's a more technical explanation about how pricing is determined in the life settlement industry.