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Moral Limits of Data: Let’s Shift the Conversation to Good Data

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Consider this. A terminally ill patient has just been told by her doctor that she has just about a year more left to live. She has a life insurance policy of $100,000. But what she needs now is money – for medical care or perhaps simply to live her life well for the last few days. Say an investor offers to buy that policy from her at a discount of $50,000 and to take over the annual premium payment. When she dies, he will be the one to collect the $100,000.

It’s a deal. The dying policyholder gets access to cash, and the investor makes a profit. But there’s a catch. Everything depends on her dying, on schedule. Known as the viatical industry, the instrument guarantees a certain payoff at death, but the rate of return depends on how long the person lives. If the policy holder dies in less than one year, the investor makes a killing (metamorphically, at least). If she survives till two years, his annual rate of return is cut in half, and he has to pay additional premium payments. If she somehow recovers, the investor could end up making nothing.

Sounds too horrible to be true? In …

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