The Hedge Funds Weblog
Death Bets
In a NewsWeek article…
The life settlements industry-the business of buying and selling unwanted life insurance policies-is attracting people from a variety of backgrounds. In the past eight years, business has blossomed as the elderly look to unload unwanted policies. The main buyers of these policies are hedge funds, speculators, and Wall Street banks, all betting that the sellers will die sooner rather than later, so they can collect on the hefty death benefits.
because of lax oversight, virtually anyone can get into the game, making life settlements fertile ground for everyone from erstwhile experts to novices to rogues. Scandals have been commonplace in the business, with some scam artists taking advantage of elderly sellers and investors in specialized life settlement funds. Yet new players keep joining the market every day, seemingly undeterred by the prospect of getting burned by bad actors.
3 Comments so far ...
This was an interesting and kind of funny article. Capitalism at its finest….
Comment on July 23, 2007 12:36 pmWhat are you referring when you say “unwanted life insurance”, it’s difficult to think of a specific term. As far as I insurance industry registers a boom growth in recent years.
Comment on November 9, 2007 07:05 amWell this is what I call an interesting approach. Usually you don’t mix life insurances with bets but it looks like in this case this made a successful combination.
Comment on July 16, 2008 10:41 am