Tuesday, November 27, 2007

I Wonder If These Guys Do The Scrooge McDuck In Their Death Pool

If they are not taking the Scrooge McDuck plunge, they should have watched more Disney afternoon. They obviously don't know the sheer, ecstatic joy of swimming through coins. Trust me- they have enough money to do it.

Alan Buerger is profiled in the Wall Street Journal as a pioneer in "Life Settlement" policies. What is that, you ask? Buerger leads a pack of people who buy life insurance policies off the living.

How about an example: Let's call the guy Stephen. Stephen needs some spare cash, so he sells his mother's $2 million life insurance policy to Buerger, who continues to pay the yearly premium, for 205,000 up front. Now, let's realize that this isn't a hypothetical -

Stephen Ellis needed cash, quickly, when he went over budget on a new house he was building. So the 48-year-old mortgage banker from Annapolis, Md., started shopping two policies, with a combined death benefit of $2 million, that he had taken out on his 75-year-old mother. Mr. Ellis had been paying $35,000 a year for the policies, he says, but the insurer would have paid him virtually nothing to cash them out... A small firm offered $205,000. He accepted. "I didn't really look at it as morbid," says Mr. Ellis, who supports his mother financially. "I thought, 'Wow what an incredible way to put a value on this.'" His mother has been in poor health but approved of the sale to benefit him now rather than later, he says. She was unavailable for comment.
I think i would hate to be a fly, but if I had to be one, I would have wanted to be the fly on their wall to overhear that conversation. "Look, mom... I'm going to sell your life insurance to someone who is financially invested in your imminent death... but before you complain, check out these beautiful granite countertops. In a house like this, you could die happy. Not you! One. One could die happy. I totally care whether you live..."

[Wall Street Journal]

1 comment:

Binny said...

All of a sudden, Sean Taylor's death starts to make more sense.

Seriously, though, isn't potential murder a dangerous consequence of this? I mean, there have been enough books and movies with plots involving killing someone to collect life insurance; the kicker there is that the person supposedly wouldn't want the person dead -- spouse, child, etc. Now take out the emotional investment out of life insurance and who knows what ensues.