Wall Street Considers Securitizing Life Insurance Policies

 As Wall Street searches for new investment options, one idea investment banks are reportedly considering is securitizing life insurance policies: Banks would purchase life insurance policies, package hundreds of the policies together, and then sell the packages to investors as bonds.  

However, there are a number of set-backs and criticisms associated with this idea, including increased insurance premiums, fraud, rating difficulties, risk of the investment, and more of the same thinking that led to the recent financial meltdown on Wall Street.

See Jenny Anderson, Wall Street Pursues Profit in Bundles of Life Insurance, NY Times, Sept. 5, 2009.