Betting on Death

Habersham opened its bidding at $250,000. “You’ve got to give us more money than that,” Fiedler recalls yelling during a phone negotiation. “This guy is really sick!” The company bumped its offer to $305,000. Fiedler accepted, and the stakes were set. The buyer’s profit would be the $500,000 insurance payout upon Robles’s death minus the $305,000 settlement and whatever the company had paid in premiums. Escobar, meanwhile, was hoping that his friend could beat the grim odds. “I told Ruben, ‘Look, they’re betting that you’re going to die,’ ” Escobar says. “ ‘You’re betting that you’ll live.’”

From last weekend’s Times Magazine: If you have a life insurance policy, and are going to die soon, but you need money now to pay for things instead of having a payout go to your beneficiaries after you’re dead, you can try to go for a life settlement (or viatical settlement if you’re terminally ill). Basically, what happens is you get a buyer to pay you cash in exchange for that buyer to be named the beneficiary on your policy. The buyer agrees to pay your premium, hoping that you’ll die soon so they can get a payout, hence, the “betting that you’re going to die” quote above. Ruben Robles was diagnosed with brain cancer in 2007, given two years to live, and accepted a $305,000 viatical settlement for his $500,000 life insurance policy. Someone bet that he would die, but he hasn’t yet—he’s still alive today.

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