Financial Instruments With A Bullet

On the front page of the Sunday NY Times, there was a column about new Wall Street investments, which were instruments made up of insurance policies that people had sold for - oh, say 40 cents on the dollar, because they needed or wanted the money now - to investors who now held the policy until pay-off , pay-off being the death of the old policy holder. I discussed this with my nephew, Alistair. It pretty much followed the path all such discussions take: he said - for example - that no one held a gun to the heads of the old policy holders; they wanted money, or they needed money, and they freely sold. My point was that that since the pay-off is bigger the sooner the old policy holder - the person whose life was and is being insured - dies, you now have a financial instrument with a decided political aspect - an unfortunate aspect: Even though no one held a gun at your head to sell me your policy, you may bet that afterwards I shall indeed hold a gun to your head to increase my return ! How? I could oppose health care, for example, with everything I had. If I could deny you health care, if I could achieve an average lessening of the life span of the many individuals - some of whom would probably be people from whom I bought policies - I would increase my pay-off. So I would work against health care, reducing emissions, etc. The quicker they die, the better off I am.