Bellwether Industry Announces Visionary Plan [a guest post]

Hartford, Conn., Oct. 24, 2009 (INS). Hartford-American Life Assurance (HALF) today announced a new product whereby American citizens could insure the lives of the unborn. Company spokesperson Camille Frottage told the press that HALF will now insure the life of any fetus whose inception has been verified by a physician against being stillborn. “Those who criticized the insurance industry for securitizing life-insurance policies will be glad to hear about this new visionary plan to securitize life before birth.”

The policy will allow prospective parents to take out a HALF-Life policy for up to nine months before their fetus is born. If the baby is normal for the first four years of its life, the insurer will pay at maturity the face value of the policy, up to $100,000. But should the infant be stillborn or have a congenital defect or develop a condition like low IQ, the insured would forfeit all premiums paid up to the date of diagnosis or the child’s fourth birthday. Premiums start at $1,000 per month, depending on the amount of coverage.

“Buyers of this policy will have extra incentive to get the best prenatal and pediatric care,” Ms. Frottage said. “No one who has paid premiums will wish to forfeit them because of failure to provide the fetus or the new-born with good medical care.”

Critics of the new policy, however, argue that it amounts to placing a bet that a new life will avoid the increasing pitfalls for a healthy birth and early childhood in a society suffering from escalating rates of infant mortality and birth defects. Moreover, said Dr. Stephanie Stethos, chief of pediatrics at Hartford Downtown Hospital, “Big insurers would have an incentive to poison the well of pediatric care in order to assure their wager against a child’s reaching age four.”

Noted medical ethicist Victor Y. Nobel, Ph.D., points out that HALF and other big insurers are bundling these policies together in lots of a thousand and selling them to investors as securities. “These policies are being touted as the next big thing in the securities industry and will soon encourage a bubble that will threaten the economy, not to mention the lives of the very young.” On the other hand, he admitted, medical schools can expect a big run-up in the number of students choosing a specialty in pediatrics. “Naturally, new doctors in our country want to maximize their earning potential,” he explained.

Timothy A. Gartner, the embattled undersecretary of the Treasury, issued the following statement from Washington: “We at Treasury are in no position to quash any new financial instrument that might get our economy back on track. As with all other investment vehicles, our best advice to consumers is simply caveat emptor.”

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