Deutsche Bank, which is soon expected to open in Denmark, has set up several investment funds which cash in on life insurances if people die early.

Investors and the bank have purchased life insurance policies from people in Germany and the United States, taking over premiums against retrieving payments if the policy holder dies prior to the term of the policy – typically the age of 65.

There are currently over DKK 5 billion in the funds. But if the insured person dies after the policy term, the bank’s investment is lost.

Danish law permits trading in life policies, but so far no financial institutions have done so.

Deutsche Bank says it has no qualms with the concept. “We thoroughly inform clients of the chances and risks involved in the investment,” says Deutsche Bank Spokesman Michael Lermer in a short comment on the so-called ‘db compass Life Fonde’.

Unacceptable
Jørgsen Cappelørn, who is a member of the Danish Ethical Council, says that he is firmly against the funds as they make life and death into a business.

“If the banks are not themselves able to see that winning on the death of people is outside what is acceptable, we must have an ethical discussion on the subject and eventually legislation,” says Cappelørn, who is also a professor of theology at Copenhagen University.

Roskilde University Ethics Professor Jesper Ryberg says it is inappropriate for strong groups in society such as banks, to have an interest in blocking improvements in general health.

“One thing is whether you like the investment issue itself. Another, and more worrying aspect is if major banks have an interest in slowing health reforms and other things that are in the public interest in order to secure their investment,” Ryberg says.

Liberals: Strange
The Liberal Finance Spokesman Jakob Jensen says investments in early death are ‘strange’, but adds that banks are the masters of their investments and it is up to Danes to determine whether they will accept the offers.

Cons. OK
The Conservative Finance Spokesman Mike Legarth says that provided that banks are within the law, he sees nothing against it.

Social Democratic Finance Spokesman Morten Bødskov says that the government parties have not learnt from the economic crisis – that investments such as Deutsche Bank’s early death funds helped trigger the crisis.

“As far as I can see, this is way beyond what normal conservative banking should involve itself in,” says Bødskov.