# ASC 325-30-30: Investments—Other — Investments in Insurance Contracts — 30 Initial Measurement

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/325/30/#30-initial-measurement)

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## ASC 325-30-30: 30 Initial Measurement

[Read section](https://asc.understandingaccounting.org/asc/325/30/#30-initial-measurement)

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##### [325-30-30-1](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1)

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A policyholder shall consider any additional amounts included in the contractual terms of the policy in determining the amount that could be realized under the life insurance contract.

##### [325-30-30-1A](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1A)

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An entity also shall apply the measurement guidance in paragraphs

[325-30-35-5 through 35-7](https://asc.understandingaccounting.org/asc/325/30/#325-30-35-5)

at initial measurement.

#### Exchange of Mutual Membership Interests for Stock in a Demutualization

##### [325-30-30-1AA](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1AA)

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Stock received from a demutualization shall be measured initially at fair value.

### Life Settlement Contracts

##### [325-30-30-1B](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1B)

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[Paragraph superseded by Maintenance Update 2018-02](https://asc.understandingaccounting.org/updates/maintenance-updates-2018/).

#### Investment Method

##### [325-30-30-1C](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-1C)

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Under the investment method, an investor shall measure its investment in a [life settlement contract](https://asc.understandingaccounting.org/glossary/l/#life-settlement-contract "A life settlement contract is a contract between the owner of a life insurance policy (the policy owner) and a third-party investor (investor), and has all of the following characteristics: The investor does not have an insurable interest (an interest in the survival of the insured, which is required to support the issuance of an insurance policy). The investor provides consideration to the policy owner of an amount in excess of the current cash surrender value of the life insurance policy. The contract pays the face value of the life insurance policy to an investor when the insured dies.") initially at the transaction price plus all initial direct external costs.

#### Fair Value Method

##### [325-30-30-2](https://asc.understandingaccounting.org/asc/325/30/#325-30-30-2)

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Under the fair value method, an investor shall measure its investment in a life settlement contract initially at the transaction price.