Variable Annuities: Death Pay

So here's a new scheme that may seem morbid, but actually works: Investors Recruit Terminally Ill to Outwit Insurers on Annuities (from WSJ)

In short, the investor pays the terminally ill to enter a V.A. (i.e. $2,000) and then the investor puts $1,000,000 into the annuity, which pays the beneficiary after the terminally ill person passes away. Worse case scenario the investor loses $2,000, best case is infinity return, as the VA is guaranteed to pay the initial $1MM at the time of death.