Your Death: The Royal Flush of Wall Street’s Gamble

 In Notes

The simplistic daily transactions of individual citizens to the complex management of corporate structure. Within this spectrum of securitized products lies an array of venture opportunities and strategies that are available to both novice and sophisticated investors alike. The subject of this Note—life settlements—is one example of an investment strategy that has become available through the advent and now prevalence of securitization. In a life settlement agreement, an insured will sell his policy to an investor for an immediate cash return. The investor then becomes the beneficiary of the insured’s policies and will ultimately collect the death benefit. These settlements, therefore, not only offer clear benefits to consumers and the general public, but also present a host of controversial implications that have made life settlements the target of criticism and, recently, the focus of proposed legislation. This Note will outline the general principles of securitization, discuss life settlements as a securitized versus non-securitized product, address the advantages and disadvantages of life settlements, and consider the achievable (or perhaps the most suitable) methods for administering or monitoring the life settlements industry through a uniform approach.

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