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Wall Street Can Sell Bets on Your Life

Wall Street banks and other firms can sell bets that you will die prematurely.

“You can bet your life” or shortened to “you bet your life” or shortened further to “bet your life” or shortened even further to “you betcha” are versions of the same slang. While the short versions are usually applied to trivial assertions, the longer versions are sometimes used to emphasize certainty on issues of importance. In 2008, Vice Presidential candidate Sarah Palin used the phrase “you betcha” to cloak her statements with a frontier authenticity. She was Governor of Alaska but chose to re-enforce her rugged bea-r-hunting image rather than her administrative experience and grasp of global issues.

Of course, you can bet on your life. Life insurance companies are in the business of taking you up on such bets. It is a common-sense wager for both you and the insurance company. They provide money to support your family if you die prematurely; they make money if you live beyond the term of the policy or your life expectancy. However, in addition to taking a gamble that you will live at least as long as expected, the life insurance company factors administrative costs and a profit into the premium. With life expectancies rising, life insurance companies also get to collect additional premiums before having to pay out benefits. Therefore, additional life insurance is not usually a good investment strategy for other financial goals.

Strangers can also bet on your life–as an investment strategy. The stakes are still your life, but in this case you are not at the craps table. The dealer at that craps table is a company that buys and sells life insurance policies. These companies do not just build in a modest cost factor for administration and a reasonable profit. Unlike a life insurance company, they don’t care how long you live or their long-term credibility. All they have to do is buy your life insurance policy and then entice an investor at the craps table to place one bet that you will die soon enough for the investor to make a profit on your death. Each year you live, beyond the paid-up premiums, requires the investor to pay additional life insurance premiums on top of the original price that he paid for your life insurance policy. The investor hope you die ASAP. (Criminals might help the process along-if they know whose life they need to shorten in order to collect.) The dealer, on the other hand, doesn’t give a damn if you live to 100. He has made a handsome profit on the one-time sale of your life (insurance policy).

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