By Shawn Chandok
During the current economic downturn, Wall Street investment banks appear to be doing almost anything in order to profit. One of the developing ideas bankers have come up with is essentially gambling with life insurance. They begin their plan by first buying out life settlements from people who may appear to be dying soon, such as the elderly or terminally ill. “Then they plan to securitize these policies, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die. 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. Either way, Wall Street would profit by pocketingsizable fees for creating the bonds, reselling them and subsequently trading them.” In my opinion, I believe this is by far one of the most unethical measures taken during a hardship that resembles the black market. One of the most popular companies, Goldman Sachs has already begun developing a life index which allows investors to predict the probability of death, thus making profit. Although this idea is still under development, it won’t be long before banks begin implementation. If the government doesn’t intervene now to stop this mayhem, who knows how far Wall Street will go for a profit?
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