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“Insurance is not a financial instrument” That’s just not correct. There are plenty of insurance policies where people buy them as an investment with the hope
by code4tee 6y ago
“Insurance is not a financial instrument”
That’s just not correct. There are plenty of insurance policies where people buy them as an investment with the hope of profiting off the payout when the insured asset has a loss. Credit default swaps being one such instrument.
Not saying that’s a good thing, but it certainly exists.
The scores of fake identities was clearly wrong but just “gaming the system” is generally not a crime. Look up the story about chocolate pudding and airlines.
Back when CDs paid a real return and credit cards gave free cash advances with 6 plus months no interest (neither of which exist anymore) had a lot of friends that would just use their good credit to get a bunch of cards, get “free” cash for 6 months, buy a CD with it (Sometimes from the same bank that gave them the free cash!) and just sit back and let the bank send them free money... then pay off the card when the CD matured after 6 months.
It was totally gaming the system but if the banks were dumb enough to let it happen then it’s sort of on them at some level.
- nogabebop23 6y ago>> The scores of fake identities was clearly wrong but just “gaming the system” is generally not a crime. Buying an insurance product - financial instrument or not - under a fake name most likely is a crime or at very least a disqualifying act. It's not "gaming the system" as you describe. Gaming would be a novel approach or changing the scale/magnitude of what a normal person would do; normal people don't fake their identity to buy insurance. Your CD example is gaming the system until I start apply for credit cards with a fake identity; that crosses a clear and obvious line.
- code4tee 6y agoI think we agree. Saying fake identifies = not cool. Gaming the system (without fake identities) may not be nice but probably not illegal (in most places).
- adrr 6y agoCompanies will buy life insurance on their employees if they think they can make money on the policy. Walmart famously made the news for this. https://online.wsj.com/public/resources/documents/april_19.htm https://online.wsj.com/public/resources/documents/april_19.h...
- jonfw 6y agoI've had two cards with 18 month interest free promotions recently. If you invest the cash you would have normally used to pay the card off, than that's a free 8-15% gains! Kills your credit score due to high utilization until the promotion is up and card is paid off though
- sukilot 6y agoYour first example was an abuse of insurance that crashed the economy, which says something about what should be. Your last example is a contract of adhesion where the person setting the terms (and profiting from them on average) assumes responsibility for those terms.