I had a chance to look at death tables recently and the drop off is rather dramatic for men starting at around 75 (for women it is noticable at 85 or so). That

I had a chance to look at death tables recently and the drop off is rather dramatic for men starting at around 75 (for women it is noticable at 85 or so). That said, I am sure insurance companies knew what they were doing. Therefore, what this scheme amounts is in effect investors thinking they are smarter than actuaries(or willing to take a lesser payout, or some bizarre tax advantage). Let's assume one 80 year old can buy a 10million dollar policy(for simplicity we assume all premiums paid to the end of life) for say 5 million. Then investors offer 5million 100 thousand for the said policy. Person is richer 100 thousand out of this. That is investors think that the person will die sooner than the insurance company has calculated. If the investors buy sufficient number of policies, they are guaranteed a pretty steady income, but as the article shows it is not risk free.