WALB had an interesting piece on this morning about an odd investment vehicle. What folks are doing is buying life insurance policies from elderly folks. They pay something like 50% of the face value of the policy (say $500,000 on a $1 million policy), and then wait for the older person to pass on. The rates of return are high, 100% or more, and in theory you will recoup your investment.
But some people seem to think it’s immoral.
Now, in all fairness, I could never invest in such a vehicle. It seems creepy to me, investing and “hoping” someone dies quickly so I can make a quick buck. But is it wrong?
First, I can see why an elderly person may want to sell their life insurance policy. After all, it provides cash upfront that can be used for home repairs and funeral planning before you go. It could also be used to pay off debts. All of this would make things a little bit easier on the loved ones left behind.
But some don’t just want to regulate it, they want to ban it.
Why they want to was a bit fuzzy to me. I mean, heaven forbid that these older folks have the right to sell something they paid for to someone who wants to buy it. Why on Earth would someone want to do something like that? I mean, using the logic that we should prevent people from selling something they paid for to someone else, then we should ban old folks from selling their cars, or their home, or their television.
As I said earlier, I don’t think I personally could invest in such a vehicle. The idea makes me uncomfortable, and I’m sure I’m not alone. But since when is personal discomfort grounds for banning something? If we’re going to do that, then we should also ban Paris Hilton, Christopher Lambert movies without “Highlander” in the title, Barry Manalow music, and Chihuahuas. But that’s not how things work. Discomfort isn’t grounds for the banning of anything.
