Structured product specialist Meteor is launching its first open-ended product, a life-backed Oeic.
The firm thus follows Keydata to become the second UK structured product provider to generate income via a life-backed product.The Meteor Senior Life Settlement Sterling fund, which launches on 1 October, differs from earlier offerings in being open-ended, however. It pays 8% per annum monthly through a tax-efficient partial encashment of shares.
The product has a growth target of 9-10% and pays out 8% with no capital protection.
The major risk to life-backed products is that policy-holders may live longer than expected, since the new owner of the policy has to pay the premiums to keep the policy in force.
The fund does not buy any policy with a life expectancy of more than eight years, however, and has a claims experience of 35 months.
