I worked for a hedge fund for almost 5 years that strictly bought UL's off of "health compromised" seniors. They would price off of the person's health, mostly buying paper that had between 3-7 years of life expectancy, shorter paper would be too expensive and longer paper not a good return. Most of the seniors were very wealthy who no longer needed the coverage or their estate changed which affected their needs. Anyhow, not too many people know about this investment but its out there. Basically when you buy the policy off the old owners you become the new owner and assume all the responsibility with that policy until the insured passes. So you pay the premiums until then.
Life Insurence ????
- Thread starter seoulbrotha
- Start date
...the above post reminds me of some of the "shady" sides of the life insurance that I saw during my tenure in the biz. I remember a scheme out of new york where this group of agents were selling life insurance to people infected with AIDS. They weren't even selling it, hell, they were buying it. The agent would get the person to sign up and "pay" them a small sum of money.... The agents would pay the premium and the insured would list a friend of the agent or member of the agent's family as the beneficiary.... It only worked on low face term policies that didn't require a full medical work-up until we caught on.... There was a lot of money made over a few years before we closed the loophole....
yes, that was definately a black eye for the industry. there is still a market for the "viaticals" concerning people buying those policies off of people infected with AIDS. The problem arose here when people with the virus started to live longer, causing the owner or the one paying the premiums to stay on the policy longer, thus reducing their return.
In my case we were dealing with senior citizens who were "health compromised". How long can a senior with a list of problems, diseases etc. really outlive a life expectancy between 3-7 years??
The main problem with "life settlements" is that the industry is not regulated by any governing body, thus creating a vacuum for shady business, deals and above all shady people. Believe me, this market is huge and will probably only get bigger, ecspecially with hedge funds, but until there is a watchdog out there who can police the things going on, it won't get nearly as much attention.
In my case we were dealing with senior citizens who were "health compromised". How long can a senior with a list of problems, diseases etc. really outlive a life expectancy between 3-7 years??
The main problem with "life settlements" is that the industry is not regulated by any governing body, thus creating a vacuum for shady business, deals and above all shady people. Believe me, this market is huge and will probably only get bigger, ecspecially with hedge funds, but until there is a watchdog out there who can police the things going on, it won't get nearly as much attention.
