The Secured Life Fund, a product that seeks to earn returns from transactions in insurance policies held by terminally ill patients in the US has been launched in the UK.

The fund is listed on the Irish Stock Exchange and requires investors to commit a minimum of €250,000 (around $306,600). The fund is being targeted at institutional investors, including wealth managers.

This specialist investment sector has been driven by the desire of people such as the terminally ill to unlock the value of their policies when they can still make use of the money. Firms in this sector say returns are steady and have low correlation with equities, making this asset class ideal for cautious investors seeking steady returns.

Investors into The Secured Life Fund can choose from either 5, 7 or 10 year investment periods, each of which will provide fixed returns paid annually in arrears. Returns range from 8 per cent for the five year bond, 8.5 per cent over 7 years, rising to 9 per cent for the 10 year bond.

Income is generated by investing in a combination of cash, cash equivalent assets and principally through the repayment of loans collateralised by US life insurance policies.

The fund gives a cash resource so that money can be lent to terminally ill cancer patients and their families. It allows them to borrow against the maturity value of their qualifying life insurance policies at reasonable rates, according to the managers of the fund in a statement.

Loans will be made typically to cancer sufferers who have been medically diagnosed as being ‘beyond treat-to-cure’ and who are in need of cash to meet medical and living expenses for their remaining time.