Life Settlement funds

With the market going the way how it has been these days, many thoughts have gone through my mind. The equity market is down, our government is stepping in the capital markets funding financial institutions as well as individuals and the list goes on and on, the hedge fund and private equity industry has posted their lowest returns in 10 years, and even the global market is taking a substantial hit with the nikkei reaching it's 26 year low.
The secondary market for life insurance recently started in the late 1990's and is growing rapidly. Life settlement is when an individual sells their life insurance policy for less than face value. A life settlement is the sale to an investor (3rd party) at an amount in excess of the contract's cash surrender value, but less than the death benefit. The good aspect about this investment is that you know the face value that you will receive from the policy, but you do not know the "when" and the "how". Since you are betting on the life expectancy of the individual who sold his/her life insurance, you do not know when he/she is going to die and you do not know how much you will make or lose in this process.
However, especially with today's volatile market and with all the negative news, many savy investors have ventured into the secondary market for life settlement funds as another source of investment. These investors realized that if they bought these polices for significantly more than the insurance company's cash surrender value and paid the premiums, the policy payout amount at the death of the insured individual should result in a profitable return. Most insurance companies do not default on paying out death benefits. Also, regardless of the market conditions, life settlement policies appreciates in value every year since the older the insurer is, the closer the investor is to receiving his payment. This seems like a viable source of investment in today's market and seems to be growing more in popularity. Life settlement investments started roughly 10 years ago and is expected to grow 10 fold to $160 billion within the next several years. It is something to think about while our 401(k) is losing double digits every quarter and our portfolio is rapidly decelerating as well- that is if the brokerage house hasn't closed our account yet.