Secondary Trade
Creating Liquidity
The secondary marketplace up until now has been pretty much non-existent. The ability to efficiently re trade a policy after it has been purchased from the policy holder, or even a collective pool can be a cumbersome lengthy process. The LiqueFi system enables the ability to re trade singular policies, collective pools, and singular policies from a collective pool as easily as trading bank notes in the span of seconds. As well as fractional portions thereof. And this happens without the need of an asset backed token. Just by having the ability to efficiently re trade a singular policy, pool, or block enables an entire secondary marketplace to flourish just like the large stock exchanges of today. The LiqueFi infrastructure supports and enables secondary marketplaces of trade and can be set up inside of the current banking industry today.
The days of the ubiquitous buy and hold strategies with shorter term life expectancy durations and lock up periods are no longer required functions. Providing efficient means of creating liquidity fundamentally changes the current nature of the industry landscape.
Lending
The treatment and neutralized custodianship aspects of the LiqueFi system creates a new paramount in the abilities of collateralized and secured types of lending arrangements.
These various types of lending positions are also tradeable, fractionable, and liquid as bank notes with the ability to efficiently re trade, split, swap, or fraction thereof in the span of seconds.
The ability to directly connect a lending marketplace into secondary longevity risk contract trade and re trade can forever change the secondary life insurance marketplace.
Individualized Policy Holder Loans
Life Insurance Policy Owners can use their policies as collateral based on NPV to take secured lines of credit and durational term types of loans. Using the policy as collateral (or fraction thereof), means the policy holder no longer has to take a loan against their own accumulated “cash accumulation value” inside of a policy. Imagine that a policy holder, instead of selling their policy (life settlement), can take a loan against the NPV, pay off the remaining premium payments as a lump sum payment, and just pay the interest on the external loan. The decentralized nature of asset custodianship realized in the LiqueFi process enables this to happen without the need of split beneficiary types of arrangements.
Margin Trading for the Fund Manager
Fund managers can now use the LiqueFi system to create collateral types of lending arrangements to fulfill policy premium obligations and manage the gap in shortfalls of life expectancy valuations.
Creating a Lending Fund
Fund managers based in the lending arenas would now be able to create funds based on lending to individuals and life settlement asset managers. And this would all be secured and collateralized against the underlying asset value of a policy through the LiqueFi decentralized banking infrastructure.
New Markets
Conversely, a completely separate marketplace “untethered” to a life settlement transaction can be established just based on the possibilities of lending arrangements with the underlying secured asset being a life insurance policy.
This is all made possible through the decentralized custodianship aspects of the LiqueFi system.
Going Beyond The Current Constrained Parameters Opens Up New Blue Oceans of Opportunities
- Collateralized secured lending arrangements and obligations (CDO)
- Fixed Income Funds
- Short to Mid Term Lending Funds
- Mid to Long Term Growth Funds
- Exchange Traded Funds
- Fund of funds, mutual funds with efficient means to liquidate individual or collective positions without affecting the capital and asset stack.
Tertiary Trade
The current industry thinks of tertiary trades as the 3rd chain in the process as it gets to an institution. At LiqueFi, Tertiary Trade is the ability to create and trade tertiary products. Our system and methods of process are the foundational element enabling new paradigms for:
- Derivatives
- Swaps
- Futures
- New Methods of Creating Securities
- New Protocols for Efficient Securitization
- Structured Products
- Tranches that can be created as Secured Lending or Policy Durational Buckets. Our infrastructural methods, operable in the current banking system today, can be used to create the same type of financial landscape as the mortgage-backed security markets with corresponding tranches. Additional derivatives can be derived from these tranches. A big difference is that the underlying asset being the life insurance policy is not reliant on the policy holder making the premium payments as a mortgage holder is when obtaining a mortgage.
Tapping Into The 97%
With the current constrained parameters, the current industry trades approximately 3% of the annual lapsing senior market. 97% is left on the table and at the expense of the policy owner. The LiqueFi system expands the parameters of what is possible enabling abilities to tap into the massive remaining 97%.
DATA REVENUE
The required data collected to enact a life settlement transaction is some of the most sought after and valuable data in the world. This data is owned by the policy holder and insured. It is not possible to monetize this data collected due to the constraints of regulations and data privacy laws such as PII, HIPPA, GDPR etc.
…Until now.
Through the LiqueFi systems process the ability to monetize this data is now possible.
And this is done under the highest levels of ethics, anonymization, and in accordance with government laws for the benefit of the owner of the data (the policy holder and insured).
Our proprietary methods enable the creation of a Data Brokerage Model with ensuing Data Revenue Fund. A game changer when it comes to finding delta, creating a competitive advantage, and creating reasons why an insured continues to upload their up-to-date information over time.
Who currently buys this type of data: Governments, Life Insurance Carriers, Re Insurance Carriers, Research Centers, Universities, Pharmaceutical Companies, Pension Funds, Credit Banks, Investment Banks…
An estimate of the current annual spend for this same data is $519B.
THE DEMOCRATIZATION FOR THE RETAIL INVESTOR
Recently we have seen there are current attempts at enabling the idea of the retail investor to participate. For us, this is a step forward in the right direction in opening up the marketplace.
Unfortunately, the methods being used to “enable the retail investor” are still being done predicated on the same old antiquated models. There is no new invention of method other than acting as a traditional buy and hold fund with lower thresholds for investment in lockup periods.
The LiqueFi system can be used to fundamentally change the paramount of how this is done with the creation of a "Cash Flow Commodity Money Currency" for the retail investor. This method enables annual (or monthly) payouts / dividends without lockup periods but also functions as a tradeable bank note (currency). The ability to trade this bank note does not affect the capital stack, nor would it require a liquidation event. This method can be set up in the current banking systems today.
Incorporating blockchain technologies with the LiqueFi process enables the ability to create a Cash flow Commodity Crypto Currency that would be tradeable on platforms such as Coinbase.
A true methodology of democratizing the secondary life insurance marketplace for the retail investor.
