WSJ Reports on Life Settlement Fraud
Saturday's Wall St. Journal had this report on the growing crackdown in the life settlement arena. The story focuses on a Florida insurance became rich selling the policies, but who now faces criminal charges. According to the article:
Mr. Brasner's reversal of fortune is part of a post-bubble crackdown by state authorities, aimed at the middlemen who played a crucial role in filling the pipeline for stranger-originated policies. In a frenzy that bears some similarities to the subprime-mortgage debacle, billions of dollars of stranger-originated life insurance was sold to senior citizens between 2004 and 2008 with the intention of selling the policies to investors. The investors thought they spotted an opportunity in policies that seemed underpriced; some funds accumulated hundreds of such policies.
This is yet another example of why individual investors should stay away from life settlement investments. There are just too many crooks in the business.
For more information on this topic, read about A&O Life Funds.
20/20 hindsight for those of us involved in this mess. We've learned a valuable lesson that's worthy of passing along to our children.
Run away! Run away from these investments. Between the wife and I we have 14 policies after 4 years. We are starting to pay policy premiums already this year. With no one passing away yet. I calculated by the end of next year we will be paying ~$10K in premiums. The medical credentials of the individual evaluating the life expectancy on these policies was to liberal and now we are stuck. So RUN AWAY from these fast.