Betting on someone’s life could put your portfolio six feet under

MarketWatch

By Robert Powell

BOSTON (MarketWatch) — Life settlements are not wildly popular investments. But they are wild investments. And to that end, federal regulators and lawmakers are fast at work trying to tame these slippery products, which promise a much higher return over more traditional conservative offerings.

A life settlement is a transaction in which an individual with a life insurance policy sells that policy to another person, who then assumes responsibility for paying the premiums.

Last week, the Government Accountability Office (GAO) warned consumers about participating in life-settlement transactions “due to a lack of clear, consistent state oversight.” The Securities and Exchange Commission recommended that life settlements be clearly defined as securities so that the investors in these transactions are protected under the federal securities laws.

Commentary by Michael Abraham:

At last a well balanced and reasoned article!

http://www.marketwatch.com/story/life-settlements-are-doa-as-an-investment-2010-07-29

Published on 16 Aug 2010 at 06:08 am