You might have heard of Viatical Life Insurance Settlements. The viatical settlement is when a life insurance policy owner sells the policy to another party. The buyer discounts from the face amount of the policy but usually pays an amount in excess of the cash value of the policy. This provides the seller an immediate cash settlement that’s higher than he would have gotten from the insurance company. The buyer continues to pay the premium until the death of the seller. Then, the buyer collects the face amount of the policy.
Most of the time, viatical settlements are done by people with shorter life expectancies, such as terminally ill patients. This settlement procedure is a practical way to generate cash that may be needed prior to the death of the policyowner, such as medical bills, health insurance premiums, or pre-burial plans….even just living expenses.
Well, the Wall Street Banksters (gangsters?) has figured out a way to turn life insurance policies into a security that they can sell. They are putting these cash value life insurance policies into portfolios just like they did with mortgages. They are selling these new securities around the world to investors. And not just private investors, but institutional investors like mutual funds, pension funds and such. Seems that the big institutional investors didn’t learn ANYTHING from the collapse of the sub-prime mortgage securities market. They are willingly snapping up these new securities as fast as Wall Street can produce them.
About the only thing that could negatively affect these securities is an unexpected lengthening of life expectancy. So, make sure you do what you can to die early!
Remember that the insurance companies are complicit in these new securities. Don’t be surprised if they are actually buying them. It would give them a way to get some of their death benefit money back. Spreading the risk, so to speak.
Some people never learn.