It's just the wizardry (well more like necromancy) of the marketplace at work! http://www.marketwatch.com/story/life-settlements-could-be-wall-streets-next-act-2009-09-06
Not a bad idea, I don't think. Life insurance is already a spooky, almost surreal translation of human life into math , and if people prefer to receive money now for their life insurance, rather than after they die: that seems reasonable to me. Of course, it indicates that life insurance is probably oversuggested for many many people. Ed O.
Well you see, in between Obama's education at the Massadrah in Indonesia, weekly flights to Moscow, tending an organic garden and making a Tie-dye shirt at The Farm Barack would also spend a few days at the Hayden Lake compound in Idaho. Being the kind of type-A evil genius Barack is, he of course took time to learn investment banking. The idea for death bonds came to him during one of his eight daily prayers in the direction of Mecca. "By Allah, that's an idea worthy of Joseph Stalin or perhaps Abby Hoffman, I'm not really sure who those guys are but regardless this idea strikes another blow for godless communism, let the free market reign supreme!" It went down something like that I reckon'! The above was inspired by Hoojacks inspired sig. picture.
Wait, you think it's a good idea that desperate senior citizens who are desperate to buy medication etc. sell their life insurance policies (their legacy to loved ones) to investment bankers for pennies on the dollar? Then the investment banker in turn has an incentive to hope seniors die so they can collect on the policy? Yeah, you're right how could that go wrong?
As opposed to ... what? NOT selling them for pennies on the dollar and going without money right now? I support their right to get their life insurance money now if they WANT to, whether it's for full price or pennies on the dollar to the Easter Bunny. That an investment banker is going to root for any given senior to die is RIDICULOUS. The investments will be pooled and sliced and diced. Of course, one might argue that "investment bankers" (and/or people who have invested in these funds for their retirement) could pressure government to create and environment where seniors die faster (death panels? Free Big Macs?) but that would be offset by insurance companies trying to stave off collective death so they don't need to pay policies off. Ed O. Ed O.
I think this is the exact same argument anti-UHC folks were using with their "Death Panels" which are not a confirmed fact. This is businesses saying they are creating an investment incentive for Seniors to die earlier. You are right about the Seniors getting money for their policies now. I disagree with the vehicle. If the Life Insurance corporations wanted to redeem them now at a lower price I wouldn't have a problem with that. 3rd party life insurance is simply too dangerous to allow. To my knowledge I can't take a life insurance policy out on say you or anyone not my spouse or perhaps child. For sure I can't buy them for strangers. Don't you think criminals would take them out on homeless people and then help them along if that were the case? I'm not arguing that JP Morgan would hire a hit man to kill an individual I'm saying you are sowing the seeds for a Logan's Run type scenario as you suggested. Over time the incentives for banks to see a generation die off would far exceed the assets of any one individual to keep their life maintained. You might see eugenical policies regarding age put into place down the line. The potential for corruption is far too great in my opinion.
As I understand it (I actually know a couple of people who do this) the focus is not so much on convincing seniors to sell existing policies, but finding seniors willing to sign up for a policy in return for a pile of cash. But you are right - someone who does this is creating a situation where another person will profit from their death. It's a little creepy. barfo
Well, yes. You usually assume that the wife and kids have other reasons to want you alive, however. The purchaser of your policy has no reason to want you alive. barfo
OK, that wasn't my reading of it, but if you know people who do this I will take your word for it. Still seems highly susceptible to corruption. Glad you agree on the creepy factor.
But there's a direct one-to-one correlation between the person dying and the wife and kids getting money... there's nothing approaching that with these bonds. There is possibility for influence on policy shifts, but that already exists in a variety of ways (young people don't ALWAYS want old people to keep on living, using resources, and voting in the interests of old people... at least not at a macro level) but I don't think it's likely and I'm certainly not worried about it happening. Ed O.
True, but you can also buy individual policies from the insured. It doesn't have to be sliced and diced into a instrument the way this article describes. If you wanted to sell me your life insurance, you could. barfo
So if I buy into one of these bonds . . .. I am hoping people die, or better yet a natural catastrophe?
a vaguely related story http://money.cnn.com/2009/09/08/news/economy/health_care_vaccinations/index.htm Kind of scary!
