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securitizing life insurance

2009-09-08 15:18:33.441667+00 by Dan Lyke 3 comments

Strong feelings about the health care proposals currently being debated in Congress? You can put your money where your mouth is, securitized "life settlements" (early purchases of life insurance policies) are now available.

[ related topics: Politics Health ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2009-09-08 16:59:10.168876+00 by: petronius

This is old news. The article itself mentions that his was a big deal in the 80s, in the first flush of the AIDS crisis. I remember a local monthly magazine for AIDS sufferers. Almost all the ads were for "viatical companies" who would buy your insurance settlement. Since the sick were considered doomed in the short run, it looked like a good deal from the investor's viewpoint. Unfortunately, the development of anti-retrovirals greatly increased life-spans, and the deal didn't look so good anymore. It was a slightly grusome business, but at least an honest one.

#Comment Re: made: 2009-09-08 17:14:22.129827+00 by: Dan Lyke

I don't think this is about the life settlements, I think this is about the securitizaton and tranche-ing of the settlements.

Yeah, the basic notion of life settlements makes a lot of sense to me. Splitting them seems like it's a more fertile ground for hidden fraud than doing the same thing with mortgages.

#Comment Re: made: 2009-09-08 20:06:21.072314+00 by: petronius

True, bundling these settlements together is a new approach. The Viatacals were individual deals.

I remember when I was a kid in the 1950s there was a radio drama called Johnny Dollar". He was a detective working for insurance companies to investigate crooked claims. I can see the current version, "Eddie Euro, Life Settlement Sleuth".