This week in the “Wall Street Journal” there is an article by Leslie Scism entitled “AIG Gets Legal Victory in “Life Settlement” Suit.” The idea of people selling their life insurance policies because they can’t afford the ever-increasing premiums is logical. The premiums go up as one gets older. looking to sell their policy for a cash settlement for part of the insurance policy face value and forgoing the monthly or quarterly premiums makes sense. Another reason for selling these life insurance policies is that many people who were making excellent money suddenly found those resources drying up and they needed money to pay unexpected hospital or medical bills and in some cases helping their children. Whatever the reasons for selling life insurance policies it has become a big business and when you have big business opportunities you invite potential fraud.
In Leslie’s story AIG shows 18 billion dollars with net death benefits. To give you an idea someone with a 1 million dollar life insurance policy successfully sells that policy to an insurance organization getting $300,000 and is free of any further insurance premiums because the organization buying life insurance policy will pay that premium until the orginal owner dies. The company collects the 1 million dollar life insurance payment and ends expensive premium payments. Just as a point of information a quarterly payment [which will go up each quarter] can be in the $5000 range for a person who is between 70-75. As I said before not having to pay $20,000 plus a year to maintain your life insurance policy is a great incentive to sell that life insurance policy. They also free themselves from premium payments and have cash in hand to pay for health care bills or other expenses.
Now my purpose is referencing this WJS story is because about three years ago I wrote a novella called Actuarial Casino [renamed No Option] that covers the greed and financial traps a person can experience when attempting to buy individuals life insurance policies with the intent of make huge profits…..if all things go as you plan. If you would like to read this novella free please contact me at my blog; firefoxe.me or via my e-mail address email@example.com and I will send you a copy electronically.