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Submit a News January |
January 23, 2010; Journal Sentinel | Thinking too long about the concept of life insurance tends to leave one queasy. Betting on your or your family’s demise is not a joyous wager. No more joyous and perhaps more macabre, if that’s possible, is the life settlement business where making money off the death of strangers is the name of the game. In Wisconsin, local school districts in particular have been courted by investment firms to borrow money to buy into the life settlement market. The Whitefish Bay, Wis. School District made $400,000 to $500,000 on policies it took out on its own employees, with their permission, to help pay for retiree benefits. Life settlements are now a nearly $8 billion industry in America and can be a dangerous market for nonprofits. Matthew Piaker, a Boston-area attorney specializing in investments and estate planning called the investments “highly unregulated” and “fraught with fraud.” The investments are so risky The Wisconsin Office of the Insurance Commissioner is working to draft legislation that would prohibit so-called stranger-originated life insurance—that is, policies written with the intent of quickly selling them to life settlement investors. Similar legislation has already been passed in 20 states nation-wide. The moral is this story is that betting on your own death or the death of others to generate revenue is not only macabre but highly risky too. Read how one Wisconsin school was hoodwinked by a fraudulent life settlement investment.—Aaron Lester
