Wall Street's Latest Invention- Life Settlements

[deception]

After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one.

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

http://www.nytimes.com/2009/09/06/business/06insurance.html?pagewanted=1&em

 

[bodyman5001]

This country and the people that inhabit it including myself make me sick.

 

[DaRizzle]

Im a couple heart attacks away from retirement

 

[maxiep]

It's little different than a reverse mortgage. These people have paid into their life insurance policies for years. Rather than passing it on to their survivors, they're recapturing that money by selling the beneficiary rights to the people cashing them out.

 

[Shapecity]

This isn't anything new. There's a lot of companies doing this already.

 

[deception]

This isn't anything new. There's a lot of companies doing this already.

ive heard the same thing, although, apparently it was a niche market and it appears wall street wants to make it widespread now. btw, here in canada it doesnt happen because a beneficiary needs to be stated, i.e. next of kin instead of a brokerage house.