Late in Life, Finding a Bonanza in Life Insurance
The New York Times, December 12th, 2006
Marvin Margolis, an 80-year-old Manhattan financial consultant, is looking for investors willing to bet on when he will die.
Two years ago, Mr. Margolis bought a large life insurance policy.
Now, he’s considering selling it to a group of investors, a deal that
should give him as much as $2 million to enjoy in his final years. In
return, the investors will get the policy’s $7 million payout when he
dies — which they hope will be soon, so they can stop paying his
premiums.
“This is a wonderful opportunity to use my body as an
asset,” Mr. Margolis said. “I deserve to be able to benefit in some way
from my age.”
Trading in life insurance policies held by wealthy
seniors has quietly become a big business. Hedge funds, financial
institutions like Credit Suisse and Deutsche Bank, and investors like Warren E. Buffett
are spending billions to buy life insurance policies from the elderly.
Other investors are paying seniors to apply for life insurance, lending
them money to buy the policies, and then reselling them to speculators.
This nascent market illustrates one way that investors are hoping to
make money from a large and wealthy generation of Americans as they
reach retirement age. These aging baby boomers and those even older
offer both opportunities and risks for many companies, investors and
swindlers seeking to capitalize on their final years.
Read more of this article. Learn more about Life Settlements.