Recent comments

Reading about life settlement companies that have been prosecuted, it's the individual private citizen investors in those companies, in essence the real buyers of the policies, who are often individuals looking to get a better return on their retirement investments, who are being exploited. They have often been promised returns that are not sustainable. As someone mentioned above, those with AIDS benefit greatly from life settlements. The industry was created in response to a need, back when the "AIDS cocktail" didn't exist. Life insurance policies now have clauses that allow 1/2 or more of the death benefit to be paid out to those with a terminal illness (without the insured losing ownership of the policy--the balance of the death benefit is still paid to the family/beneficiary), but life settlements generally are paid out earlier in the process of illness, or even to those who are not ill. The calculations are complex. There is plenty to expose in those who are exploiting investors, some of whom have lost their life savings, and to bring bad acting life settlement companies to justice. To paint a financial arrangment that is of benefit to those who need cash at end of life as a bad thing in and of itself seems to be a misunderstanding. Is the author against car loans, mortgages and insurance in general? Financial products can be structured fairly or abusively. It's the abusive practices that need to be brought to light, and proper enforcement of regulations, or creation of new ones that is important. I am sure most of the readers and supporters of this organization support credit unions and the idea of state owned banks. Financial institutions need to be regulated. There are many laws on the books in states that regulate the life settlement industry. Unfortunately, it seems that they have not been completely effective in getting rid of abuses. So it goes with financial regulation. Rational discourse about these matters seems to be a good way to win the broadest base of support for the causes promoted here. I join L Leslie above in asking what this organization believes about the monetization of life inherent in life insurance?

While I sympathize with the point of this post, creating a re-market for life insurance policies does seem like it could be a way to enable people to liquify one of their least liquid assets at the time when they most need the money. Obviously, this is an area which could become ripe with abuse and exploitation, but if strictly and carefully regulated, allowing the policyholder to use the funds they have paid in rather than reserve it for their heirs seems like an excellent idea. People may pay in for years while they have dependent children, but if they then need that money for their own care later in life, having a secondary market to provide this liquidity may very well benefit the policyholder immensely. Thank you for bringing this shadow market to light, and I would be interested to know if your objections to the practice are based on an objection to the monetization of life inherent in life insurance in general or if there are specific abuses being propagated in this particular reinsurance field which are objectionable?