When Is It Acceptable to Profit From Death?
Couples, families, businesses and even the government deal with the financial details of death every day. Wills are written, life insurance policies purchased, caskets chosen and funerals arranged — all transactions that help drive an industry around death. Hospices benefit from the sick and the dying. Pension plans become more solvent when pensioners die. But the story of Joseph Caramadre — a wealthy Rhode Island attorney and philanthropist — pushes the boundaries of how much we are willing to put a price on death.
As ProPublica’s Jake Bernstein reports, Caramadre realized that variable annuities were unlike life insurance. With life insurance, there are laws against profiting from the death of strangers. You can’t take out an insurance contract on a neighbor down the street.
Caramadre realized that some insurance companies did not preserve that rule for variable annuities.
This opened a whole new universe of possibilities. Variable annuities, which allow consumers to invest in mutual-like funds, usually have a death benefit. If you invest and die while the policy is active, your beneficiary gets a lump sum equal to the death benefit or the value of the investments in your account, whichever is greater. Caramadre figured if he could sign up the terminally ill to serve as what the insurance industry calls the “measuring life,” he would have the perfect investment.
That person would die relatively quickly. If the account did well, he would reap the gain. If the account did poorly, the death benefit would give him back at least his original investment.
In exchange for the signatures and personal information of the dying participants, Caramadre paid between $2,000 and $20,000.
The arrangement landed Caramadre and one of his employees in court over allegations that they stole the identities of the dying to open up accounts. As part of the case against him, videotaped depositions were taken of people who had been paid to be measuring lives. Below are clips from depositions with two people who tell very different stories about their experiences.
Take a look at these perspectives and then tell us what you think:
‘I know that my wife had the best time of her life because of what they did’
‘My body is going to be sold without my wife getting a dime’