She beat odds; dealer won't pay
When M. Smith was diagnosed with cancer and AIDS in the early 1990s, she was given two years to live. That she is still very much alive today is good news - to everyone but the people who bet big on her dying.
Had Smith perished on schedule, Life Partners Inc. would have made $60,000 on a $90,000 wager - a 66 percent return on the investment. Instead, the company that expected to make a profit on Smith's life insurance policy wound up spending $100,000 more keeping her alive.
Now, Life Partners' attempt to wriggle out of the relationship has led to one of the most morbid contract disputes ever filed in New Jersey Superior Court.
This is a pretty badly written article, in that I have a hard time telling who exactly is sueing whom, and on what basis, but I think what's going on is that the company is trying to simply pretend that they never had a contract with this woman in the first place. But the truly horrifying part is that this line of "investment" exists at all!
"They're not a charity. These people win by having her die fast. They were not counting on a revolution in the treatment of AIDS," notes Cohn, of the Cozen O'Connor firm, who took Smith's case for free.
Life Partners' president and General Counsel, Scott Peden, declined comment about the lawsuit - which he said he believes is the first of its kind in the company's 15-year history of helping "thousands of terminally ill patients."
We didn't buy her health insurance. There's no value there, it doesn't benefit us," Peden told me in a brief phone interview Friday.
It is not too uncommon- a company buying being named benificiary on a life insurance policy for money now or to pay health care costs for a terminally ill patient. It is a very morally questionable practice, but at the same time the person would likely not be able to afford the care on their own.
The crappy reporting is typical of the Phila. Inquirer, compounded by it being (apparently) an opinion/news analysis piece.
You didn't know about these kinds of deals? Are you sure you're *really* living in San Francisco?!
I remember seeing flyers for them around the city. I know it sounds morbid, but if it weren't for these kinds of deals, homelessness amongst AIDS patients would've been much more common, especially during the mid '90s.
Oh, that's right... you had no life then! Ok. Well, nevermind!
This is a pretty badly written article, in that I have a hard time telling who exactly is sueing whom, and on what basis.
I'm going to have to agree with your assessment on that one. Looks like Life Partners is getting sued for not paying the bills they agreed to. I'm assuming that they believe this is possible due to the linkage of health & life insurance, and hoping that they'll be severable even if they didn't seem that way in the contract.
The good news for people who get to sort this out is that if the company is paying money to somebody for "goodwill" it'll be on their books that way (yay accounting!). Yes, accountants track what you spend every dollar on and/or the SEC eats your soul. If their books have "$blah: M.Smith insurance payments" they're F'd in the A.
Actually, if you're a terminally ill patient, you can make the end of your life a lot more comfortable (and possibly just a lot more fun, if you're still functional) by selling your life insurance for pre-death cash.
If you're gonna die anyway and you don't have offspring that need your dough, why not have some fun with some of the money you'd never see anyway?
Of course, the companies themselves are not exactly altruistic...
i want a piece of this action starting now
I suspect somehow that this isn't an option for the person we both know.
she claimed she could sell her judgement. she just didn't like the terms.
Viactical companies advertised in gay publications throughout the late 80s and 90s. It was totally morbid and depressing to read those fucking ads.
Viatical policies were very popular in the 80's and 90's due to almost-guaranteed early death of an HIV patient.
Now they've expanded to the elderly in the from of "reverse mortgages" which allow the owner to hand their property equity to a company in exchange of monthlyu living expenses -- it's all about actuarial tables -- playing the odds.
Given the reality that Social Security and Medcare aren't -- this is now the only option for many seniors today. So much for handing the family home to the kids -- corporations are the new heirs.
Mmm...family values.
Yep, these deals reached the UK too. If you don't have dependants, I can see them being very tempting, even with the National Health Service's free treatment. The advent of combination therapy means they're not common now.
But you can still find people willing to buy old people's houses, and let them continue to live in them until they die. Or take over people's investment-based mortgages for more than the finance companies will pay.
In France, people pay for the rights to appartments, I heard of one little old lady who was on her sixth contract, having out lived the first 5 people.
+10 points for the Daria ref.
I think their complaint is that they're paying both her life insurance (which, if they didn't, would lapse and they would get nothing when she does finally die...hopefully after a long and fruitful life of sticking it to the man) and her health insurance (which, if they didn't, would lapse and possibly allow them to collect on the life insurance sooner since she presumably wouldn't be able to pay for her meds). So the one "adds value" (grrrr) and the other doesn't. For some reason the two policies are connected, according to the article.
The only problem with their argument (besides the obvious fact that it's a ghoulish contract, but apparently one entered into willingly by both parties so that in itself isn't really a problem to me) is that they agreed to pay both as long as she lived. Well, insurance and viaticals are a business of statistics. She's way out on the tail (you go, girl) but that's no reason to void the contract.
The Marine Insurance Act of 1901 explicitly forbade betting like this for ships. In the 19th century, shipowners would load an old unseaworthy ship to the gunwhales, take out a huge policy, and collect when it sank, crew with it. It used to be called the "channel stakes".
As someone might be tempted to make sure they'd collect, I'd've thought the sort of "insurance" mentioned would be banned under law so I'm not surprised the Insurance Company is playing coy.
As an aside, a friend of mine told me this story:
Two building site carpenters who were friends used to meet regularly at a pub. One came in one day and said "I've got bad news. I've just been to see the doctor. He said I've got cancer and I've got six months to live." "Oh. That's too bad. I've got a 4 months contract available. Do you fancy doing it?"
In my earlier years, I would blow off telemarketers by telling them I had just learned I had a terminal disease. The usual effect would be a moment of uncomfortable silence followed by a blissful lack of me being on the phone any more.
One guy was a born salesman though. Upon learning that I only had 8 months to live, he said, "Great news! We're selling 6-month subscriptions, and if you're going to be bed-ridden then you'll surely need magazine subscriptions to get you through the day!"
Genius.
I'd probably have bought it just for that.
When I originally heard about these many years ago, they were referred to by the investment community as "death futures".
Hey, where's the grim meathook future?
As they say business is business, but it is disheartening that some do their business in such manner. Agreements ought to be agreements. I am no lawyer, but by the way it looks the insurance company cannot getaway with their claim that in no way did they have an agreement of paying for M. Smith's bills.
greyface: "The good news for people who get to sort this out is that if the company is paying money to somebody for "goodwill" it'll be on their books that way (yay accounting!). Yes, accountants track what you spend every dollar on and/or the SEC eats your soul. If their books have "$blah: M.Smith insurance payments" they're F'd in the A." <-- Really? I don't know this. Thanks for info! Bard Jameson
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