Death Bonds
The New York Times on September 6, 2009 published an article by Jenny Anderson titled “Wall Street Pursues Profit in Bundles of Life Insurance”. The article is about the securitization of life settlements which the article states are life insurance policies that ill and elderly people sell for cash. Wall Street investment banks 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.
This blog is not about whether life settlements are good or bad. My concern is for the privacy of the insureds, the potential for fraud and abuse and the possibility of increased costs for life insurance.