Once upon a time, life insurance was a stodgy financial product, bought to protect loved ones and provide cash to pay potential estate taxes. Today, it has been sliced, diced and securitised, but not always in winning combinations.

It began with “viatical settlements”, which allowed terminally ill holders of life policies to sell those policies for needed cash. Next up were “life settlements”, under which healthy older policyholders no longer in need of life insurance could sell their policies to investors for more than the insurer would pay in cash surrender value.