Q: What is the FSA’s view of life settlement funds?

The FSA stated TLPIs are known as ‘death bonds’ because investors are putting their money into a pooled investment or fund which invests in US life insurance policies.

Basically, a TLPI investor is betting on when a particular set of US citizens will die and if these people live longer than expected then the investment may not function as expected.

Evidence from the FSA’s work to date has found significant problems with the way in which TLPIs are designed, marketed and sold to UK retail investors.

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Many of these products have failed, causing loss for UK retail investors, the FSA warned.