The Surprising Business of Life Insurance Policies

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Are you worth more dead than alive? That’s the premise behind this fascinating New York Times Magazine piece, which goes into depth behind life insurance policies.

First, the author drives one point home:

Selling your life and selling a house have more in common than you’d think. The seller puts a listing on the market. Prospective buyers do research and get inspections; there are offers and counteroffers until the seller accepts a bid. The seller doesn’t literally peddle his own life, of course, but his life-insurance policy. The distinction is in many ways moot, however, as the sales value is inextricably linked to a cold-eyed estimation of how much longer the seller has to live.

There are many, many reasons why selling your own policy can be a bad idea:

For all the supposed benefits, settlements still strike many people as creepy. They invert the traditional incentives of life insurance. Insurance companies have always had an interest in you, the policyholder, living as long as possible so that they can collect more premiums. Generally, you also want to live a long time, for obvious reasons. But a settlement means someone hits the jackpot when you die, and the sooner that happens, the more money that person makes.

The investors who buy policies from others must be diligent (even if what they are doing is unsympathetic):

Life-settlement investors, like those in other sectors, crave timely information about their holdings, and the key metric for predicting portfolio performance is the health status of the policyholders. To acquire this sensitive information, Fred says a Vespers representative would call and question the policyholders — or their adult children, nurses and doctors — as often as quarterly. He would then receive tracking reports summarizing what the company learned.

Much of what I’ve read in the NYT piece I’ve read previously, in different concoctions, at other sites. So the biggest takeaway from the piece, for me, was near the end:

Back in 1921, a Stanford University psychologist, Lewis Terman, selected 1,528 kids for a study on what demographic and psychological factors enabled students to excel, in both their early years and later in life. The children were regularly assessed even as they grew into adults, got jobs and had families. After Terman’s death in 1956, the project was taken up by other researchers, who continued tracking the participants all the way into the 21st century. That the study hadn’t been designed to analyze longevity scarcely mattered to Friedman: here was a large group of people who had undergone standardized assessments from age 11 till death. Friedman and his colleagues exhaustively mined the Terman data for statistically valid correlations between the “psychosocial” profiles of the participants and how long they lived. “Surprisingly, the long-lived among them did not find the secret to health in broccoli, medical tests, vitamins or jogging,” Friedman wrote in his 2011 book “The Longevity Project.” “Rather, they were individuals with certain constellations of habits and patterns of living.”

Friedman’s findings buck much of the conventional wisdom on longevity. For instance, the cheerful study participants were less likely, on average, to live to a ripe old age than the more serious ones, in part because happy-go-lucky people are prone to “illusory optimism,” meaning they underestimate health risks and are less likely to follow medical advice. Highly sociable people, on average, did not live longer than less gregarious ones as is commonly believed, because they tended to drink, smoke and party more. Over all, Friedman found a longevity edge for the successful nerds of the world, the scientist types over lawyers and businesspeople. “The findings clearly revealed that the best childhood personality predictor of longevity was conscientiousness — the qualities of a prudent, persistent, well-organized person — somewhat obsessive and not at all carefree,” Friedman wrote.

Sounds like it’s good to be a nerd!

But really, if this topic is new to you, I suggest reading the entire piece. The topic is macabre, but it’s quite fascinating.

A Brief History of Trading on Wall Street

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You don’t get to read about history in the Dealbook blog, but we get a great one today about the history of trading on Wall Street. It’s pretty crazy to think that in the early days of Wall Street, stock prices were communicated by runners:

Even after the introduction of the trans-Atlantic cable in 1865 and the telephone in 1878, brokers still relied on manpower over gadgetry. Market prices were listed on slips of paper, and runners, most younger than 17, would deliver letters between brokerage houses, according to a report by Alexandru Preda at the University of Edinburgh. The new technologies were not seen as reliable. Problems ranged from typographical errors in the closing stock prices listed by newspapers to outright forgery.

In the days after the Civil War ended, traders seeking a timely edge still relied upon foot speed. The fastest man on Wall Street was William Heath, a celebrated runner with a huge drooping mustache, who was nicknamed “the American Deer.” Standing an inch taller than the Olympic sprinter Usain Bolt of Jamaica, Mr. Heath was reported by The New York Times to have been “as quick in his locomotion as in his operation.”

On the invention of the first ticker symbol, which was unreliable:

In 1867, Edward A. Calahan, a draftsman with the American Telegraph Company who previously worked as a messenger on Wall Street, unveiled the first stock ticker. The device, which earned its name from the unique sound it created, featured two wheels of type placed under a glass jar. The ticker printed off company names and stock prices on a narrow strip of paper, which was read aloud by a clerk.

Mr. Calahan’s machine was the first step in a major technological revolution of Wall Street, but it was also slow and unreliable. Twice a week, the batteries had to be filled with sulfuric acid, which was carried around in buckets. More important, the wheels of type would not always print in unison resulting in a mash of letters and numbers.

Catch up on the rest of the history lesson here.

How Movies Are Censored in Iran

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Max Fisher writes a column in The Atlantic on the technology used to censor films in Iran:

Censoring foreign movies used to mean simply pulling out the scissors, cutting away inappropriate scenes and shots until the film was a good deal shorter and made a lot less sense. But, in 2010, Iranian authorities acquired new technology allowing them to manipulate images and dialogues into Islamic inappropriateness. 
 
“Romantic dialogue is often changed. For example, it isn’t proper for a woman to say to her partner, ‘I love you,'” Iranian journalist Reza Valizadeh explained to Radio Free Europe’s Golnaz Esfandiari in a 2010 interview. “It’s clear how dialogue about sexual proposals is dealt with — they are changed to marriage proposals. Also we see that beer becomes lemonade on state television and whiskey becomes orange juice. Also dialogue about politics is often changed.”
 
Censors will sometimes edit immodest images — whether it’s a man and woman sitting too closely, someone drinking a cocktail, or even an open neckline — by cutting the offending person or object or by simply placing some visual obstacle. The Iranian film fan site CaffeCinema.com put together a series of side-by-side comparisons showing the before-and-after of this new censorship technique. 
Click through to see startling examples of censorship in the post.

A New Insect Species Discovered Via Flickr

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One day in May of 2011, Shaun Winterton was looking at pictures of insects on the Internet when something caught his eye. It was a close shot of a green lacewing — an insect he knew well — but on its wing was an unfamiliar network of black lines and a few flecks of blue. Winterton, a senior entomologist at the California Department of Food and Agriculture, has seen a lot of insects. But he hadn’t seen this species before. So he sent an email to the photographer Guek Hock Ping, who told Winterton the creature flew away after he photographed it. But:

A full year later, Winterton received an email from the photographer; Guek had returned to the region of the original sighting and found another lacewing with the same wing pattern.

“He told me, ‘I’ve got one in a container on my kitchen table — what should I do with it?’ ” Winterton says.

The specimen was sent to Steve Brooks, an entomologist at the Natural History Museum in London. Brooks confirmed that the lacewing was new to science. He also found a matching specimen that had been sitting in the museum’s collection, unclassified, for decades.

The new species was dubbed Semachrysa jade — not after its pale green color, but after Winterton’s daughter. It was introduced to the world in the latest issue of ZooKeys, a scientific journal focused on biodiversity. In keeping with the digital nature of their discovery, Winterton, Guek and Brooks wrote the paper from three different continents using a Google document.

The moral of the story? The world is full of potential naturalists, Winterton says. More and more people using high-quality cameras that capture the kind of detail scientists need for identification, and they are sharing these photos online.

Semachrysa jade, a new lacewing species, discovered via Flickr.

NPR has the rest of the story here. Amazing world!

Seth Godin on Initiative and Starting Out

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Seth Godin offers this piece of advice on initiative and starting out in this The Great Discontent interview:

There’s a picture that I just saw online two days ago… It’s a picture of someone graduating from college. You can’t tell, but you can guess that they’re probably $150,000 in debt. Written on the top of their mortarboard with masking tape it says, “Hire me.” The thing about the picture that’s pathetic, beyond the notion that you need to spam the audience at graduation with a note saying you’re looking for a job, is that you went $150,000 in debt and spent four years of your life so someone else could pick you. That’s ridiculous. It really makes me sad to see that. The opportunity of a lifetime is to pick yourself. Quit waiting to get picked; quit waiting for someone to give you permission; quit waiting for someone to say you are officially qualified and pick yourself. It doesn’t mean you have to be an entrepreneur or a freelancer, but it does mean you stand up and say, “I have something to say. I know how to do something. I’m doing it. If you want me to do it with you, raise your hand.”

The entire interview is excellent.

I am a big fan of Seth Godin’s books, especially Linchpin, which I reviewed here.

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(hat tip: Tina Ross Eisenberg)

BAM: The Other Siberian Railway

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This is a wonderful New York Times travel piece on the Baikal-Amur Mainline railroad, otherwise known as BAM:

When most people consider crossing Siberia by rail, they think of the Trans-Siberian Railway, the 5,000-mile-long rail line stretching from Moscow to the Pacific, which was finished in 1916. But two-thirds of the way through the continent from Moscow, the Trans-Siberian sprouts an artery — the BAM — that inexplicably darts north through a blank spot on the map with few towns or even paved roads, a mysterious and enormous railroad loop through nowhere.

Begun under Joseph Stalin as a northern alternative to the Trans-Siberian, the BAM was finished only in 1991 though it’s still being tinkered with to meet growing Asian demand for Siberian lumber, gas and oil.

The author posits that the BAM isn’t so tourist friendly, and that it doesn’t offer all the plush comforts of the Trans-Siberian. The BAM:

…[W]as built for freight and people who have business in the wilderness. The dozen cars on the first leg of our trip were half-filled with workers and managers destined for Siberia’s lumber camps and oil and gas fields, as well as people working on the train line itself. As such, it is more of a utilitarian train, with a nothing-fancy dining car that served essentially as a round-the-clock bar, a couple of packed third-class wagons with clothes draped across bunk beds crowding dormitory-like spaces, and a few second-class cars with four comfortable berths in separate minivan-size cabins.

My favorite portion of the article, the camraderie offered on the train:

Thanks to the dozen passengers who rotated into our coupe during the weeklong journey — among them an engineer heading to the oil fields north of Lake Baikal, a navy officer on leave, a college student who didn’t say a word — our table was a perpetual buffet of pirogi, boiled chicken, pickles, hams and lots of tasty things I couldn’t pronounce. Our contribution was whatever local snack we could buy from the babushkas during the 10- to 15-minute stops the train made at various stations, and the omnipresent, daily replaced bottle of vodka. 

I’ve added this piece to the travelreads collection on this blog.

Paul Miller’s Internet-Free Year

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Paul Miller, a technology reporter, is currently on a quest to go without the Internet for a year. He occasionally reports on his progress in The Verge. In this post, he recounts his life without the Internet after three months:

The first two weeks were a zen-like blur. I’ve never felt so calm and happy in my life. Never. And then I started actually getting stuff done. I bought copies of Homer, Plato, Aristotle, Herodotus, and Aeschylus. I was writing at an amazing pace. For the first time ever I seemed to be outpacing my editors.

Without the internet, everything seemed new to me. Every untweeted observation of daily life was more sacred. Every conversation was face to face or a phone call, and filled with a hundred fresh nuances. The air smelled better. My sentences seemed less convoluted. I lost a bit of weight.

Three months later, I don’t miss the internet at all. It doesn’t factor into my daily life. I don’t say to myself, “ugh, I wish I could just use the internet to do that.” It’s more like it doesn’t exist for me. I still say “ugh, I have to do that” — it’s just not the internet’s fault.

If you don’t read the whole post, this is the key takeaway:

I know I’m not the first person to recognize this, but much of the charm in “taking a break from the internet” is that you end up viewing the real world through the prism of “I’m taking a break from the internet right now,” and then you get back on the internet to tell everybody about what a good time you had. A face-to-face coffee date is very different than Facebook flirting, and a really great use of time, but it’s easiest to see the novelty and value of it when you have a Facebook to compare it to. “Disconnecting” and “disconnected” are two very different things, as I’m discovering.

So: it’s good to take a break, but your motivation to take such a break will vary from everyone else’s.

A Perspective on “Having it All”

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Marie Myung-Ok Lee is a novelist who lives with her husband and a 12-year-old disabled son. In a wonderful piece for The Atlantic, she describes how she copes with her situation and that she is happy with what she’s got:

When people ask, “How are you not exploding with stress with everything on your plate?”, I know they only mean it in the best, most compassionate way. And for those who have beautiful healthy children and gleaming new stoves, I do not discount their heartaches and worries and crises. But what bothers me is the implicit expectation: that people are waiting for our inevitable breakdown, a breast-beating howl against fate that is sure to come once we realize we’ll truly never “have it all” — because of our imperfect son.

For all the people who are puzzled by my seeming happiness, I’ll be glad to let them know my “secret.” I’m not in denial, I’m not on antidepressants, and I don’t live in a fantasy world. I have a wonderful husband and I am pursuing a career I’ve dreamed of since I was nine years old. I have a beautiful son, friends, and a working stove. I am not paraplegic. I have parents who, through luck and fate, had me here in the United States, and not in North Korea. I live in a time where my awful vision can be corrected with glasses. I am a college graduate. I am never hungry unless I choose to be.

Do I have enough? Resoundingly: yes. And I ask you to take a moment: I suspect you might, too.

A daily dose of perspective.

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(hat tip: Tim Ferriss)

Apple’s Pixel Revolution

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John Gruber pens an excellent post on pixel resolution, and surmises how the new Apple MacBook Pro with retina display is the best computer Apple’s ever made:

Today’s pre-retina Mac displays are excellent, especially when judged by historical standards. Brighter, more vibrant colors, and — again, by historical standards — smaller, sharper pixels. A regular 15-inch MacBook Pro ships with a 1440 × 900 pixel display at about 110 pixels per inch, and can be configured with a 1680 × 1050 display at about 130 pixels per inch. Both the 11- and 13-inch MacBooks Air sport resolutions of roughly 130 pixels per inch. Far beneath the retina threshold, but much nicer than our sub-100-PPI displays of the 90s, to say nothing of the mere 72 PPI display on the original 1984 Macintosh.

But we went from 72 PPI in 1984 to 132 PPI in 2012 gradually — a few more pixels per inch every few years. Along the way there was never a moment of celebration, no single great leap forward pixel-density-wise. Even the shift from bulky CRTs to slim flatscreen LCDs didn’t bring about a significant upgrade in terms of pixel size.

But now this. The 15-inch MacBook Pro With Retina Display. This is a boom. A revolution in resolution. The display I’ve been craving ever since I first saw high-resolution laser printer output.

In the footnotes, John Gruber notes that the 15-inch MacBook Pro puts him in a dilemma: it’s too big a laptop to lug around as a travel companion. I’m in the same position. I played around with the retina MacBook Pro when it came out, but I much prefer my 13-inch non-retina MacBook Air for its weight and portability. But when Apple releases the 13-inch retina MacBook Air, I am going to have a hard time holding out upgrading…

On the Origin of Shark Week

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This Sunday evening, Shark Week kicked off its 25th annual marathon. Now the longest-running cable TV programming event in history, Shark Week, like many brilliant ideas, began as a concept on a scribbled napkin. Says executive producer Brooke Runnette on Shark Week’s origins:

“I wouldn’t say stoned, but the idea was definitely scribbled down on the back of a cocktail napkin,” Runnette says with a laugh. The legend, as she tells it, goes like this: In the early years of the Discovery Channel, executives John Hendricks, Clark Bunting, and Steve Cheskin, widely considered the three main primogenitors of the Discovery Channel, were seated at a bar among a group of their Discovery colleagues in what one can only imagine was probably euphemized as a “post-work brainstorming session.”

The next events played out exactly as millions of shark fanatics across the globe have probably imagined. “As I’ve heard it, they were just talking about what kinds of things would be fun to do on Discovery,” the executive producer says. “And one of them said something like, ‘You know what would be awesome? Shark Week!’ And somebody in that nexus scribbled it down on a napkin.

On the specialty of Shark Week this season:

The new programming on this 25th edition of Shark Week, for instance, is all made possible by one slight (or not-so-slight) technological update: In the aughts, Runnette’s teams began shooting with a Phantom, a high-speed video camera that can capture 1,000 frames per second. Just recently, the Phantom’s signature, breathtaking, slower-than-slow-mo shots allowed TV audiences to scrutinize athletes’ every bulging, twitching muscle at the London Olympics, and they’ve worked some of the same magic with Discovery audiences. “

Read the rest of the Shark Week profile here.