Sunday, October 18, 2009
Wall Street Eyes Profits in Life Insurance Settlements
Posted By Rico K Setyo
By Bill Weir and Jake Whitman
Fresh off the meltdown of the mortgage business last year, Wall Street's bankers have found a new way to make money: the buying and selling of life insurance policies belonging to the sick and elderly.
Financial investors take a gamble trading people's life insurance policies.
Advocates of these "life settlements" call them a valuable option for people who want or need money before they die. Critics call it a morbid and risky business that proves Wall Street hasn't learned from the mistakes of the past.
After Dr. Eddie Powell lost both his legs to a hospital infection, he desperately needed financial help to support his practice and two children in medical school.
"I had to get the money, you know, for my family to survive," Powell said.
Powell says he sold three life insurance policies valued at nearly $1 million for $150,000.