[HN Gopher] Apollo Had Some Death Bets
       ___________________________________________________________________
        
       Apollo Had Some Death Bets
        
       Author : ioblomov
       Score  : 7 points
       Date   : 2024-04-30 18:45 UTC (4 hours ago)
        
 (HTM) web link (www.bloomberg.com)
 (TXT) w3m dump (www.bloomberg.com)
        
       | ioblomov wrote:
       | https://archive.ph/TKs0m
        
       | Bostonian wrote:
       | I don't understand why investors would induce people to buy life
       | insurance policies that they sell to investors (who pay the
       | premium and eventually get the death benefit) unless life
       | insurance is underpriced. Why would insurance companies
       | underprice their policies?
        
         | mistrial9 wrote:
         | I do not understand this setup after reading one time.. Is it
         | possible that by law, the Insurance industry has to price based
         | on median life span.. but that certain demographics are very
         | likely to live longer, therefore making some small chance for
         | arbitrage ?
        
         | LorenPechtel wrote:
         | It's not that it's underpriced, it's that it's subsidized.
         | Specifically, by the fact that the payout is tax free.
         | 
         | This means that fairly priced life insurance is worthwhile if
         | your transaction costs are low enough. This leads to periodic
         | headlines from when somebody discovers the "secret" that many
         | large companies buy life insurance on their employees. Some
         | "expose" about how that shows they cut corners on safety. Nope,
         | it's just they can buy it on a large enough scale to make it
         | worthwhile.
        
         | colonCapitalDee wrote:
         | It could be because the value of the policy changes due to
         | changing circumstances, like switching career fields to a less
         | dangerous job or getting a favorable medical diagnosis. Or
         | regulatory arbitrage, perhaps Apollo can price life insurance
         | policies more accurately because they don't have to comply with
         | the same regulations insurance companies do.
        
       | foxyv wrote:
       | At first I was VERY confused thinking. Who in their right mind
       | would insure an Apollo astronaut? Then I realized we aren't
       | talking about THAT Apollo!
        
       ___________________________________________________________________
       (page generated 2024-04-30 23:02 UTC)