Step 1: The investor uses non-qualified (cash) or qualified funds (retirement account) to purchase life settlements, and signs the appropriate documents.

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Step 2a (Non-qualified): Funds are sent to a dedicated bank account for the investment/"Portfolio".

 

Step 2b (Qualified): Funds are sent to a self-directed retirement account custodian and, from there, to a dedicated bank account for the investment/"Portfolio".

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Step 3: A portion of the invested funds are transferred into a separate "reserves" bank account, dedicated to maintaining the life settlement policies.
 

Step 4: Investors receive a copy of the completed offering documents, detailing their ownership of a portion of the portfolio of life settlement policies. 

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Step 5: When a policy matures, the insurance carrier pays the claim to the dedicated bank account.

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Step 6: Investors are paid their share of the proceeds.