Monday, January 03, 2011

Insurer Sued Over Death Bets Gone Bad

Leslie Scism of the Wall Street Journal reports that several insurers have filed hundreds of lawsuits during the past two years seeking to cancel life insurance policies that the insurers say were not intended as an "estate planning tool" but rather were crafted to enrich investors speculating on people's lives.

Some investors are striking back, saying that insurers encouraged sales to investors and that the industry called attention to the practice only when its profits were less than expected. Investors want insurers to honor the policies or refund all premiums they have paid. Some seek punitive damages.

So insurance isn't "speculating"? Says who? Who are insurers kidding? Isn't that what insurance is all about? The insurer is like the" house" at a casino. Insurance companies bet you will not die, not wreck your car, or will not get sick, etc, and the insured bets that he will die or will wreck the car, and will get sick!

Can you imagine what would happen in Las Vegas if the casino said, "Hey these games are for entertainment only; we should not have to pay off because some gamblers are good at it!"

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