One of the biggest decisions an investor makes is whether to fund an investment in life settlements with non-qualified funds (cash) or qualified funds (IRA/Roth IRA/401k/etc.).
Cash
If you want to use cash, make sure you won’t need it soon. Life settlements are not easy to access. You can’t get your money back until the policy ends. This can take several years. So, only use money you won’t miss in the short term.
Retirement Account
Retirement accounts are a good match for life settlements. Most people leave this money untouched for many years. That matches how long the investment takes to pay off. Also, you won’t pay taxes right away on payouts. The money can keep growing without tax for now.