Rizal Philippines
August 18, 2016
From Guardiian - Gambling on the life expectancy of terminally ill
Some would say that this is charitable work ie channeling idle funds for the terminally ills by discounting the life insurance. The shorter the life expectancy the higher the discount. The investors buy from life insurance auctioneers of the terminally ill patient. Since life insurance is actually the reverse, the insured never get to enjoy the insurance while alive, the investors discount the life insurance and make themselves the beneficiary. The investor continues to pay the premium The insured enjoys part of the money to buy the things he needs especially for his health care, and even prepare for his interment. The buyer gets the details down to the address of the seller and makes an assessment of the investment based on conversation of the doctor on the life expectancy of the seller.
Some say that the discount takes advantage of the difficult situation of the ill patient. What do you think.
The buyers/investors generally make 40% returns per annum on their investment.
However there is an expected twist that those who encash their insurance live longer or even have a remission. The seller generally when declared as terminally ill live between 6 months to 6 years.
In the US, they have firms that professionally does this called viatical settlement firms. Insurance companies neutralized this by having a rider: accelerated death benefits.
