The recent mortgage fiasco has brought attention to the "securitization" process. The involves taking individual financial instruments, in this case home mortgages, and putting them in pools for sale to investors.  In the case of the mortgages we have read about, these pools were sold to investors all over the world, so no one really knew who actually held the mortgage on their home.
 
Despite the pain and suffering that the sub-prime mortgage problems have caused, investors like pension funds,college endowments and hedge funds are always looking for new securities for potential gain and for diversification of their portfolios.
 
The new option is life insurance.  Investors are buying pools of policies with the intent of holding them until they are paid as death benefits. The theory is that the investors can profit by realizing far greater death benefit proceeds than the premiums they have paid.  In theory, this is a sound investment.
 
The insurance that is included in the investment pools is carefully selected.  It is obtained by offering a select audience a financial incentive to deposit insurance on their lives into this pool of thousands of policies. The criteria for selection are age seventy and older, reasonably good health and a high net worth.  Candidates are offered payments of as much as $150,000 for a $5,000,000 policy and $300,000 for a $10,000,000 contract.
 
Those candidates who are skittish about the possibility of someone gaining from their demise are assured that these pools of policies are completely blind and their policy represents a miniscule part of the total investment pool.
 
Whatever your feelings about this type of arrangement, millions of dollars in compensation are being paid to candidates willing to participate. A number of studies have concluded that this is a market that is going to grow tremendously in future years.
 
Please contact us and we will be happy to send additional information to any interested readers.