Betting on your Life

[Nbadan]

The under-side of capitalism....


t4ZdgIk8f_o

[angrydude]

lol.

The clip itself says companies do this because of the tax consequences.

That != free market capitalism.

so what is your point? People are really clever when they are trying to save money? The tax code created the mess, blame that.

[Winehole23]

I guess there's no law against employers taking out policies on their workers and naming themselves as beneficiaries. Is there?

[angrydude]

I'm sure that now after this was in the film Congress will make an exception in the tax code so that this doesn't work anymore.

[Nbadan]

Just because something is not illegal doesn't make it right....companies are benefiting from the lose of a loved-one and the family gets jack shit...

[angrydude]

Yea it stinks but what can you do but outlaw it. Its the law of unintended consequences.

[George Gervin's Afro]

Just because something is not illegal doesn't make it right....companies are benefiting from the lose of a loved-one and the family gets jack shit...

but if the company took the policy out and payed the premuims shouldn't they get to keep the money?

[ChumpDumper]

Cannot people take out policies on their own lives and make their loved ones beneficiaries?

[coyotes_geek]

Just because something is not illegal doesn't make it right....companies are benefiting from the lose of a loved-one and the family gets jack shit...

Was the family paying the premiums? If not, end of story.

[Nbadan]

The problem is that the company has no emotional attachment to you living. We all have relatives we don't like, but I wouldn't take out a insurance policy on their lives because of their bad habits or life-style choices...

[coyotes_geek]

Life insurance isn't about emotional attachments. It's about financial attachments. That's why you take out a life insurance policy on your spouse who helps pay the bills and not on your children.

[boutons_deux]

Here's the shitbag, predatory, filthy wealthy banksters placing the bets on the next bubble.

===============


http://www.alternet.org/images/site/logo.gif

Wall Street Plans to Tap into $26 Trillion Life Insurance Market, Cashing in When People Die

By Jim Hightower, Hightower Lowdown
Posted on October 2, 2009, Printed on October 3, 2009
http://www.alternet.org/story/142986/


Halloween is still a month away, but ghouls, ghosts and other grotesque creatures are already roaming America's streets, possibly preparing to knock at your door. What makes them so scream-out-loud horrifying is that they are the newly issued spawn of -- shriek! -- Wall Street.

The very same greed-fueled bankers who brought us the disaster of 2008's financial crash have created another exotic financial horror to replace their securitized subprime-mortgage packages that exploded all over us.

Wall Street wizards have been down in their corporate basements working furtively to fabricate some new, get-rich-quick financial gimmick, and -- Holy Frankenstein! -- they've done it.

It's a scheme based on the mundane (but huge) life insurance market. Wall Street intends to tap into the $26 trillion-worth of life insurance policies that Americans hold, using a financial mechanism called "life settlements."

Often, the ill and elderly need cash for assisted living or myriad other reasons, and a small network of insurance brokers exists to offer them a sizeable pile of money in exchange for being named the beneficiary of the policy. A broker might pay $400,000 for a million-dollar policy.

Wall Streeters intend to turn these life settlements into a big boon for investment banks and super-rich speculators.

First, they will take over the broker side of the business, setting up extensive networks of heavily advertised, life-settlement agencies across the country to entice sick and old folks into settlements. You can imagine the come-ons: "Free Cash!" "Cash-in BEFORE You Die!" "You CAN Cheat Death!"

Next, Wall Street banks will "securitize" these settlements -- i.e., they will package thousands of them into bonds that they'll then sell (for hefty fees) to big investors around the globe. As a result, when Uncle Bob croaks in Dubuque, some speculator in Dubai will collect Bob's life insurance payout.

Drooling bankers anticipate a $500 billion market for this hustle. Even as Washington discusses ways to regulate Wall Street's earlier frenzied securitization lunacy, the giant banks are working themselves into this next frenzy. As one giddily exclaimed, "We're hoping to get a herd stampeding."

The New York Times reports that Credit Suisse is already shouting yippy-ti-yi-yo, "building a financial assembly line to buy large numbers of life insurance policies, package and resell them -- just as Wall Street did with subprime securities." Similarly, reports the Times, "Goldman Sachs has developed a tradable index of life settlements, enabling investors to bet on whether people will live longer than expected or die sooner than planned."

While this game of grave-robbing for fun and profit is exhilarating for the investing elite, it will be a downer for life insurance customers, for it means that the price of policies will go up. This is because insurance companies base their price on the actuarial calculation that numerous policyholders will pay premiums for years, but then cancel their policies before they die (due to personal financial reasons, family breakups, etc.). In these cases, the insurers collect a wealth of premiums without having to pay out a dime.

But this calculation is to be wrecked by Wall Street's intrusion into the once-straightforward relationship between insurer and insured. Now, some faraway, third-party investor will own the policy, keeping it in force until the former policyholder dies. Thus, the company will make more payouts than it figured to, compelling them to recalculate their balance sheets -- and jack up life insurance prices.

Once again, Wall Street is turning a pedestrian consumer product into a global casino game. Consumers lose, while speculators gain from exploiting other people's hardships, eventually reaping profits from their deaths.

Why should we go along with this real-life Halloween horror? As suggested by Forbes magazine columnist Michael Maiello, Congress could and should implement a simple reform stating that there's no payout on any life insurance policy that is "transferred into an investable security."

This would still allow life settlements for the relatively few people who actually need them -- but it would drive a stake in the cold hearts of Wall Street profiteers. What a happy Halloween that would be!


(http://www.alternet.org/story/142986/)

[hope4dopes]

Too many Micheal Moore movies < how many lies does this fool have to be caught in before you pull off the blinkers.

[George Gervin's Afro]

Too many Micheal Moore movies < how many lies does this fool have to be caught in before you pull off the blinkers.

since you kept quiet for 8 yrs shut th f*ck up

[angrydude]

[QUOTE=boutons_deux;3721716]Here's the shitbag, predatory, filthy wealthy banksters placing the bets on the next bubble.[/QUOTE=boutons_deux;3721716]

===============

why not when you know that when you lose or the money drys up you can just bail yourself out?

where are they getting all this money from I wonder?:rolleyes

[NoOptionB]

I'll be dead. It's all good.