Help me out guys! Read the following and if you agree, please send a letter to your representatives.

You are welcome to copy this one and use it. Let’s try and stop the absurd greed on Wall Street.

Dear Senator,

Recently, there has been some discussion of the bankers on Wall Street buying “life insurance settlements”. The plan is to “securitize” these policies by packaging hundreds or thousands together into bonds and selling the bonds to investors who will receive the payouts when people with the life insurance die.

I strongly urge you to PUT A STOP TO THIS before it has a chance to start.

This is “Morally” wrong!

When an insurance company sells you a life insurance policy, they have a vested interest in your living longer than expected. The longer you live, the more they collect in premiums. The longer you live, the more probable it’s the insurance policy will lapse and the insurance company will not have to pay out the life insurance benefit. Thus, the longer you live the more money they make.

In contrast to the vested interest of the life insurance companies, Wall Street and the holders of these securitized life insurance settlements will have a vested interest in your dying sooner than expected. Do you want a group of disinterested investors and Wall Street Bankers betting you will die sooner than you should! These groups have proven time and again that generating returns is of paramount importance to them and moral issues should not stand in the way of making money. The sooner you die, the more money the holders of these “death bonds” will make!

There are too many potential conflicts of interest!

Suppose you had sold your life insurance policy and an insurance company purchased the death bond that included your policy…the same insurance company that you have your health insurance with. The insurance companies have proven time and again that it is in their best interest to save money by denying certain procedures. However, because they now hold your death bond, they have even more reason to deny you the medical services you need. Not only will they save the cost of the medical service, but they can increase their returns if that denial results in your early demise. Will the “investors” in these products be purchasing the death bonds based on the number of current participants in their health insurance plans that each package contains? Will they justify this practice as “risk control”?

This will be bad for consumers!

Life insurance premiums are based on a number of factors: your current age; your health; your life expectancy based on actuarial tables; and the probability they will have to pay out the life insurance benefit. Often times, life insurance policyholders will let their life insurance lapse before they die, for a variety of reasons — their children grow up and they no longer need the financial protection, they have reached a point in their life financially where they no longer need the life insurance, or the premiums have simply become too expensive. When that happens, the insurer does not have to make a payout and this lack of payout is factored into your insurance premiums. But when a life insurance policy is purchased and packaged into a security, investors will keep paying the premiums on policies that might have otherwise been allowed to lapse. Consequently, more policies will stay in force, ensuring more payouts over time and less money for the insurance companies. It is a given that this will result in losses (payouts) for insurance companies and will translate into higher life insurance premiums for all consumers of life insurance products.

Again, I strongly urge you to PUT A STOP TO THIS before it has a chance to start. This is morally corrupt; there are far too many potential conflicts of interest; and it will be bad for consumers. The only benefactors of this will be Wall Street. STOP IT NOW!

Sincerely,

Vics

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