Would You Sell Your Life Insurance Policy?

Lon · Post by **Lon** » Tue Jul 24, 2007 10:45 am

If someone offered to take over the payments on your life insurance policy and pay you 20 to 40% of the face value in cash, would you do it?

Post by **spot** » Tue Jul 24, 2007 10:50 am

Undoubtedly I would, on the terms you've suggested. I've paid maybe 4% of the face value into it so far, and I can take out another tomorrow. It's a huge capital gain.

Go on, now qualify your offer.

Lisa · Post by **Lisa** » Tue Jul 24, 2007 10:51 am

I would take 40% maybe. but only if I had no one to leave it to in the end.

gmc · Post by **gmc** » Tue Jul 24, 2007 10:56 am

Many do. In the UK there is a big market in traded endowment policies. You can even buy them yourself. It's actually a safe investment but I suspect a lot of people selling them on don't quite get that they are selling their life assurance as well. Personally I wouldn't. Don't know about the states but here most life assurance plicies sold now will pay out on terminal illness.

Mystery · Post by **Mystery** » Tue Jul 24, 2007 10:56 am

So long as I could select another policy, sure I would.

chonsigirl · Post by **chonsigirl** » Tue Jul 24, 2007 11:05 am

I don't think so, my insurance policy is set up to pay off the houses for the kids........

minks · Post by **minks** » Tue Jul 24, 2007 11:16 am

chonsigirl;667202 wrote: I don't think so, my insurance policy is set up to pay off the houses for the kids........

ditto

Lon · Post by **Lon** » Tue Jul 24, 2007 11:35 am

spot;667193 wrote: Undoubtedly I would, on the terms you've suggested. I've paid maybe 4% of the face value into it so far, and I can take out another tomorrow. It's a huge capital gain.

Go on, now qualify your offer.

It's not my offer. It is currently being done in the U.S and "Death Bonds" as they are called are being offered to investors. The bonds consist of a large pool of life insurance policies on many peoples lives. As people die, the proceeds go into the pool. It's probably one of the most macabre investment schemes ever devised by Wall Street. Individuals sell their policies to an organization that then become the owners and beneficiaries of the policies. The insured dies, they collect. The older the insured, the more they are paid for their policy. This concept amounted to over 15 billion dollars in 2006 and will probably double this year.

Post by **spot** » Tue Jul 24, 2007 12:21 pm

So you're telling me that I could, were it American, trade in a policy that's had 4% of its face value put in and draw 20%-40% immediate cash in exchange? I'm baffled, I don't see that it's likely either.

minks · Post by **minks** » Tue Jul 24, 2007 12:40 pm

Lon;667219 wrote: It's not my offer. It is currently being done in the U.S and "Death Bonds" as they are called are being offered to investors. The bonds consist of a large pool of life insurance policies on many peoples lives. As people die, the proceeds go into the pool. It's probably one of the most macabre investment schemes ever devised by Wall Street. Individuals sell their policies to an organization that then become the owners and beneficiaries of the policies. The insured dies, they collect. The older the insured, the more they are paid for their policy. This concept amounted to over 15 billion dollars in 2006 and will probably double this year.

how does that happen that they hook people into this kind of thing?

Lon · Post by **Lon** » Tue Jul 24, 2007 1:24 pm

spot;667235 wrote: So you're telling me that I could, were it American, trade in a policy that's had 4% of its face value put in and draw 20%-40% immediate cash in exchange? I'm baffled, I don't see that it's likely either.

Interesting isn't it.?

http://www.businessweek.com/magazine/co ... 044001.htm

Lon · Post by **Lon** » Tue Jul 24, 2007 1:28 pm

minks;667241 wrote: how does that happen that they hook people into this kind of thing?

They are not being hooked---------it's a win win situation. .

http://www.businessweek.com/magazine/co ... 044001.htm

Post by **spot** » Tue Jul 24, 2007 1:53 pm

Okay, I see it, the con's on the bond investor. The insurance company does the sum on genuine actuarial mortality tables and sets the premium. The bond's sold on the basis that death will intervene more rapidly. Half way into the life of the bond the scheme collapses when too few people have died to collect enough from the insurers to pay more premiums and dividends.

Fine by me. Sign me up, give me my cut.

minks · Post by **minks** » Tue Jul 24, 2007 1:57 pm

Lon;667253 wrote: They are not being hooked---------it's a win win situation. .

http://www.businessweek.com/magazine/co ... 044001.htm

ok color me stupid aren't these words from a prior post or did you quote somebody or something??

"It's probably one of the most macabre investment schemes ever devised by Wall Street."

obviously I am not getting it.

Lon · Post by **Lon** » Tue Jul 24, 2007 2:24 pm

spot;667266 wrote: Okay, I see it, the con's on the bond investor. The insurance company does the sum on genuine actuarial mortality tables and sets the premium. The bond's sold on the basis that death will intervene more rapidly. Half way into the life of the bond the scheme collapses when too few people have died to collect enough from the insurers to pay more premiums and dividends.

Fine by me. Sign me up, give me my cut.

The article made me think of a book that I read some years ago called "Tontine"---a insurance scam that started in the UK in the 16th century, I believe.

Post by **spot** » Tue Jul 24, 2007 2:32 pm

Lon;667284 wrote: The article made me think of a book that I read some years ago called "Tontine"---a insurance scam that started in the UK in the 16th century, I believe.

That's not a scam!! Tontines were perfectly legitimate instruments, I always liked the idea.

Lon · Post by **Lon** » Tue Jul 24, 2007 2:40 pm

spot;667296 wrote: That's not a scam!! Tontines were perfectly legitimate instruments, I always liked the idea.

You are right, scam was a poor choice of words for what really was a disappointment for those that died too soon

Indian Princess · Post by **Indian Princess** » Tue Jul 24, 2007 3:22 pm

-does that mean louie the fish will be looking for me with cement shoes?

Nomad · Post by **Nomad** » Tue Jul 24, 2007 3:35 pm

Lon;667191 wrote: If someone offered to take over the payments on your life insurance policy and pay you 20 to 40% of the face value in cash, would you do it?

No. Unless I was living on the streets or something. Or maybe if I was fresh out of crack I might. Otherwise no.

Patsy Warnick · Post by **Patsy Warnick** » Tue Jul 24, 2007 3:48 pm

NO

Patsy