102120-202120 Fall 202...
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James Stilton is the chief executive officer (CEO) of RightLiving, Inc., a company
that buys life insurance policies at a discount from terminally ill persons and sells
the policies to investors. RightLiving pays the terminally ill patients a percentage
of the future death benefit (usually 65%) and then sells the policies to investors
for 85% of the value of the future benefit. The patients receive the cash to use
for medical and other expenses, and the investors are "guaranteed" a positive
return on their investment. The difference between the purchase and sale prices
is RightLiving's profit.
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Stilton is aware that some sick patients may obtain insurance policies through
fraud (by not revealing their illness on the insurance application). An insurance
company that discovers such fraud will cancel the policy and refuse to pay.
Stilton believes that most of the policies he has purchased are legitimate, but he
knows that some are probably not.
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Answer the following questions:
• Would a person who adheres to the principle of rights consider it ethical for
Stilton not to disclose the potential risk of cancellation to investors? Why or
why not?
• Under the categorical imperative, are the actions of RightLiving ethical? Why
or why not?
• Under utilitarianism, are Stilton's actions ethical? Why or why not? If most of
the policies are legitimate, does this make a difference in your analysis?
. Using the IDDR approach, discuss the decision process Stilton should use in
deciding whether to disclose the risk of fraudulent policies to potential
investors.
What are other ethical concerns that Stilton may be facing?
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