Germans who have invested in the demise of older Americans are getting angry that the latter are taking too long to die. Statisticians and medical experts are not as good at projecting life expectancy as they might seem to be.

This is what is happening: Deutsche Bank and other financial institutions manage complex funds that buy up Americans' life insurance policies and pay their premiums. When the policyholder dies, the entire payout goes to the fund. Meanwhile, investors provide the funds for monthly premiums. These schemes, first launched in the euphoria which gripped financial markets before the crash, seemed crisis-proof anyway since everybody dies.

But it didn't take long for disillusionment to set in. Many providers couldn't generate the yields promised in their prospectuses. For one thing, many of the insured simply lived longer than expected. For another, buying up policies became more and more expensive due to high demand. Also, a change in the law made American life insurance funds taxable in Germany for the first time.

It’s a complicated business but, as usual, only the banks etc have made any profit on the deals so far.

The moral of this story -- one of them, anyway -- seems to be that, although demography is destiny, it is also an inexact science and thus not a horse on which to gamble your retirement savings.

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