How clients of a financial guru facing fraud complaint lost bets on the dead

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How clients of a financial guru facing fraud complaint lost bets on the dead

Since 2010 Vagnozzi has also promoted the life settlement funds, in which investors buy life insurance policies from elderly people who have sold them cheap for cash.

For Vagnozzi and his clients, life settlements have been a bumpy road. His record is marked by lawsuits, a $95,000 regulatory punishment, Vagnozzi’s admission that some funds haven’t performed as expected and recent complaints from some investors that others haven’t delivered, too.

Supporters of life settlement investments say they are a boon for policyholders who need cash now and investors who profit well by supplying it. Though an unusual business — one Vagnozzi investor calls it “creepy” — the field is thriving.

In these investments, buyers purchase life insurance policies, typically from aging people who no longer want their heirs to collect, but would rather have cash up front, even if they receive less than their death benefit. They often sell the policies to middlemen, who in turn sell them to investment funds, like those run by Vagnozzi. Shares in those funds are then shopped to individual investors.
 
Are "life settlements" the only investment you can purchase that you can never get rid of outside of forfeiting the policy?
 

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