Scroll down for a discussion on New zero premium life insurance policy/miracle/financial/group within the Senior Insurance Forum.
Well just got my email.....you know what I think....I think its the doi's testing to see if anybody has taken thier anti~money laundering class's yet......HAHAHAHAHAHAHAAAAAAA
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Well just got my email.....you know what I think....I think its the doi's testing to see if anybody has taken thier anti~money laundering class's yet......HAHAHAHAHAHAHAAAAAAA
[COLOR=#0000ff]You May Have Heard[/COLOR]
about the
[COLOR=#ff0000]"ZERO PREMIUM LIFE PLAN"[/COLOR]
Issue Ages 65 to 85
[COLOR=#008000]$15,000 Benefit[/COLOR]
We have the details! We have the Best GA Contracts Available!
My husband talked to the NC DOI yesterday and they talked directly to Ali Shahrak and he told the state that he is not ready to disclose the information to them and that he would next week.
The state told my husband to call back anytime next week to see if they would approve it. They said that if Ali has the reserves and the paperwork is in order it should go but... they have to see something first.
I thought that was pretty gutsy to tell the NC DOI he is not ready to tell them the name of the company.
The state said the other 2 times we had called that they cannot research anything without company name and form number.
Last edited by angwagner1974 : 05-05-2007 at 06:26 AM.
Reason: too much
I got it!!!
I met with the top two executives from the Double Secret Insurance company.
The said it is all still "hush, hush", but I did take this picture.
How can the insurance company pay out that much? Their rating with the AM Best would tank. They have to take in more in premium than they pay out. Rule of large numbers and these people are getting ready to expire.
I have heard that it is a $15,000 investment co and $15,000 beneficiary. Of course, it is all just hearsay
Very eerie. When you die normally the life insurance company is financially harmed by cutting the check. Now you have a situation where a financial body profits off your death. Leaves a bad taste in my mouth.
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On a more serious note, here is what is troubling me.
There is no such thing as free money. You cannot just create free money from nowhere. These old people are selling their insurability for a 15k death benefit. The question is, how can they make this work while BOTH the bank and the insurance company are on board?
Traditionally, whenever you do have an arbitrage situation, one party is not aware that you are exploiting a underwriting hole, to make some money.
Lets say 1 million people participate, and the bank funds all of the premiums in exchange for the lions share of the death benefit. It would seem that the natural extension of this is that the insurance company is guaranteeing that they are the loser.
The key point is, there will be a ZERO % lapse of these policies, since they are controlled by a bank that will never forget to make the payments, and will never not be able to afford them. That is a significant factor when figuring out the premium cost. This is the issue that really bothers me.
One of the medicare advantage companies had to quite writing because they did not have the reserves with the state to issue any more policies. I wonder if that will happen with this as well
True Sam. Life actuaries figure in that most policies lapse. Also figured in is the average age of their clients - probably in the late 30's early 40's.
Now we have a batch of 65 to 80 year olds being signed up and like you said, it's not like the bank's gonna lapse or cancel. They'll be in this for the long haul until that client croaks and the life company is out.
No doubt I'll be calling the life insurance company once it's published to verify that they are indeed aware of the arrangement.
My guess? This never gets off the ground. And it's a damned good guess.
That of course puts an interesting twist on the rights of the insured.
If the insured is the owner, they can change the beneficiary, strip the cash values, etc. The investors could be covered by collateral assignment for their beneficial interest, but that would still leave the insured (owner) to strip the cash.
The carrier is probably not on the hook for that much, especially if this is a special risk policy with limited underwriting.
Most of the risk is laid off to a syndicate who lays it off again. The reinsurance syndicate may even have a piece of the action on the death benefit.
Been done before.
(I believe it is) AIG that is in the bonded life settlement business and they buy a number of their own policies to offset the losses from some of their policies that are viaticized. They also buy the policies of other companies to balance out the risk.
This is big business and has been going on for at least 20 years. The only difference here is there are investors willing to front the cash for the premium in exchange for finding old farts looking for "free" insurance.
The family takes a portion of the death benefit while the investors take the lions share. The agent get's screwed when they are willing to take a $250 finders fee on a premium that could be several hundred, or several thousand (depending on face and age of the insured).
That's chump change. (Apology to Ed from Lebanon).
This thing smells like last weeks fish. I can't believe this thread has legs and is still going on.
I understand reinsurance but there still has to be a reasonable risk. That is the whole reason for actuaries, to figure risk according to mortality tables.
When you have a reinsurer it is still an insurance company (usually) that is buying blocks of business. As a reinsurer you are not going to buy a block of business that does not work out on paper for your favor.
We work with quite a few insurance companies that have to call their reinsurers before they can take business for certain cases because it is not their risk... The problem is that the mortality tables put this as a lose situation.
Look at some of the players in the bonded life settlement business
Any of these names look familiar?
AIG
BANK OF IRELAND
BANK OF NEW YORK
BANK ONE
BARCLAYS
BEAR STEARNS
CHASE
CITIGROUP
COMMERCE BANK
DEUTSCHE BANK
GE CAPITAL
GENERALI GROUP
GEN RE
GUARDIAN RE
LEHMAN BROTHERS
M & A BANK
MERRIL LYNCH
MORGAN STANLEY
MPC CAPITAL
PRICEWATERHOUSECOOPERS
ROYAL & SUNALLIANCE
ROYAL BANK OF SCOTLAND
SCOTTISH LIFE
SOCIETE GENERAL
ZURICH
Why do you suppose companies like AIG and major reinsurers would invest in bonded life settlements if they weren't a "good deal"? Generali & Gen Re are two major reinsurers in the life business. Companies like Scottish Life, Zurich, Royal & GE are also in the life reinsurance business.
Look at some of the players in the bonded life settlement business
Any of these names look familiar?
AIG
BANK OF IRELAND
BANK OF NEW YORK
BANK ONE
BARCLAYS
BEAR STEARNS
CHASE
CITIGROUP
COMMERCE BANK
DEUTSCHE BANK
GE CAPITAL
GENERALI GROUP
GEN RE
GUARDIAN RE
LEHMAN BROTHERS
M & A BANK
MERRIL LYNCH
MORGAN STANLEY
MPC CAPITAL
PRICEWATERHOUSECOOPERS
ROYAL & SUNALLIANCE
ROYAL BANK OF SCOTLAND
SCOTTISH LIFE
SOCIETE GENERAL
ZURICH
Why do you suppose companies like AIG and major reinsurers would invest in bonded life settlements if they weren't a "good deal"? Generali & Gen Re are two major reinsurers in the life business. Companies like Scottish Life, Zurich, Royal & GE are also in the life reinsurance business.
This is a good deal for them.
The agent is taking it in the shorts.
i did not say that reinsurance was a bad deal... I said that the mortality tables on this risk is VERY high and a reinsurer is going to look at the risk indepth before they agree to reinsure it. That is the way it works. They have fulltime actuaries that calculate the risk and if it is not in their favor they will not buy the block of business.
The life expectancy in this country is not 90... there is a great risk if they offered a $150,000 death benefit. I said that I believe the number to be lower. The insurance company or reinsurer needs to believe they have a greater risk of getting the premium than paying it out. There is no way an 85 year old is going to pay more in premium than they are going to pay out.
Did I read your original email wrong because I got the impression you were saying the insurance company would not care about the risk because they would have reinsurers? If I did I am sorry.
Boy, them there is some fancy talk. Out here in Kansas we just try to keep it nice and simple.
All this time I thought grammar was a type of fish. Shoooot. Wait til I tell ma this.
Zydo - Ali up in Raleigh. That is reason enough not to get involved.
Why do you say that? I am not second guessing you, I just want to know his reputation. I have never heard of him or Miracle Insurance, but then again I am about 1000 miles away.
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