Death Bonds: Wall Street Teams Up With Insurance Companies to Kill People, Reap Profits

[Nikki Stone1]

The NY Times article on Sunday is getting some comment.

http://www.commondreams.org/view/2009/09/08-9

False accusations of plans for government "death panels" was ironic enough, given that private insurance companies have long entrenched real death panels deep within their profit-driven bureaucracy. One woman from Tennessee told a frightening story of how a hospital wouldn't give her husband a CAT scan because the hospital had cut a deal to not use the machine too often, which would cost the insurance company too much money. The financial interest of the insurance company was to provide less care to make more profit.

Now come "death bonds" to take things one step further. Having already ruined the mortgage market and plunged more families into foreclosure than ever before, Wall Street needs a new way to make money. And profiting off the sick and elderly has worked so well for insurance companies, why not expand the sector?

People with frail health who have life insurance have the option of selling their policies before they die for a lesser amount than the full value. Say you have $500,000 in life insurance. Depending on your life expectancy at the time you sell your policy, you might be able to sell it for, say, $250,000 in cash. Whoever bought it is taking a gamble. According to the New York Times:...The earlier the policyholder dies, the bigger the return -- though if people live longer than expected, investors could get poor returns or even lose money.
Now Wall Street's latest scam is to bundle life insurance policies purchased from the sick and the elderly into securitized death bonds and funds. The earlier the group of policyholders die, the bigger the return.

Insurance companies already had a financial incentive to deny care and increase profits. Now Wall Street banks are adding another incentive -- the sooner people die, the sooner death bond prices rise. And since it's really the same super-rich investors benefiting from both enterprises, the grand conclusion is simple -- poor health is good for profits. If the opponents of health care reform have their way, the quality of our health care will only get worse.

[Chulanowa]

1. I would call them vultures...

But i'd hate to offend such a (comparatively) clean and noble beast as those birds.

[Phoebe Loosinhouse]

2. OMG! It's like a science fiction story coming together

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=6489989&mesg_id=6489989

Add in the recent stories about robots that run on dead bodies, and Bob's your uncle! A futuristic society of a pampered upper class served by an army of serfs whose bodies are disposed of by robots.

[Phoebe Loosinhouse]

3. Extra conga lines at Bohemian Grove this year!

They've crashed commercial banks! They've crashed investment banks! They've crashed utilities! They've crashed mortgages! And now the blood-sucking leeches are looking to crash the life insurance industry! And no one will stop them.

"Giles, we're getting chilly. Throw another 401K on the bonfire, there's a good chap."

[Nikki Stone1]

4. The only way they can get money is by raiding other industries and destroying them

We don't produce anything anymore.