Thursday, May 26, 2005

Stranger-owned life insurance

Financial speculators will truly stop at nothing. A morbid piece from the "Personal Journal" section of today's Wall Street Journal called "Letting an Investor Bet on When You Die" deatils how you can take out a life insurance policy with borrowed money and then sell that policy anonymously to a speculator who will then be hoping you die as soon as possible. You make a little money from the sale, but some ghoul you've never met really cashes in when you kick the bucket. (This isn't the only dubious and disturbing insurance scheme where strangers pray for your death. Even more disturbing is "janitor insurance," where bosses collect the life insurance for policies employees never knew they had.)

It's a scenario destined for a murder-mystery novel, wherein anonymity is breached and a greedy speculator has the seventy-five year-old granny (who fits the age demographic these instruments are marketed to) whose policy he owns bumped off, making it seem like natural causes. But no one would believe this story because no one would believe that this financial instrument actually exists. I'm frankly astounded; but apparently many laws exist to regulate this sort of thing, because it's been tried many times before, selling the financial rights to your own death. My jaw dropped when I read this: "In one instance, a client of Peter Katt, a fee-only insurance advisor, was given a spreadsheet with data on three life-insurance policies--all on strangers--in which to invest. The spreadsheet included the insured's names, ages, life expectancy in months, size of the policies and premiumns, and gross rates of return--as high as 114.9%--if the policy happens to reach "early maturity." How creepy is that? Even the Journal seems to think this goes too far. Insurance agents might be the only people who dehumanize and objectify human beings more than people in Human Resources Departments.

1 comment:

  1. This was a bigger story a few years ago, when AIDS patients were selling their policies for quick cash because they thought their days were numbered. Then AIDS therapies improved dramatically, and the people who bought those policies were really mad that the beneficiaries wouldn't die fast enough. Sick sick sick stuff indeed, but I like how the aforementioned example played out.