While it seems like most of the information out there is for senior citizens, life settlements are an investment that’s worth looking into on both sides. If you’re an investor, here’s what you need to know before you enter into any life settlement deals:

1. Senior life settlements will cost you more, but they are usually more profitable
To a wise senior citizen, a life insurance policy is a bargaining chip. They know it’s valuable, so they are likely going to make you pay through the nose to get the rights to it. Typically, the lump sum that investors pay out in senior life settlements is higher than in life settlements with younger policyholders, because the payout will come much sooner.

A savvy senior citizen understands this, and will make you pay more because of it.

However, a senior life settlement is usually more profitable than a life settlement with a younger policyholder. Remember, once you take over the life insurance policy, you’re responsible for making the monthly payments. You’ll need enough capital to cover the lump sum payment and the premium payments until the policyholder dies. But, with an older policyholder, you will likely pay far fewer premiums than you would with a younger one – so you won’t need to spend as much on a senior life settlement before you get your big payout.

2. Life settlements are based on guesses
Since there is no way to tell for sure how long your policyholder is going to live, you need a way to come up with educated guesses before you agree to a deal.

Luckily, there are professionals out there that can help you come up with an estimated life expectancy for your policyholder – based on their age and current health. If, for example, your policyholder is estimated to live another 20 years, you can factor that in to the lump sum payment you offer.

The key, though, is to find a professional that can give you accurate estimates. If he miscalculates, you can wind up spending a whole bunch of money that you didn’t plan on spending!

3.For life settlements, investment may be a team sport
Life settlements require a whole bunch of capital. In fact, these deals require money that you may not be able to come up with on your own. It’s not uncommon for investors to team up and go into life settlements together. Sure, you’ll have to split the profits down the road, but you’ll also have someone to help you split the expenses in the meantime.