Will ghoulish investments pay off?

As the global population ages, some analysts believe there are investment opportunities in somewhat ghoulish bets the rates of cancer and other illnesses will rise.

"Cancer poses notable investment opportunities," Citigroup (NYSE:C - News) said last week in a report that advised investing in China cancer plays.

"This market segment is emerging as one of the largest and fastest-growing therapeutic categories," it said.

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China's current cancer market is around 65 billion yuan ($10.46 billion), with the 2010-13 compound annual growth rate at more than 17 percent, Citigroup estimated. It expects cancer cases to continue increasing, driven by the aging population and environmental changes.

"The age structure is one of the key indicators for cancer demographics. In general, cancer incidence increased notably in people aged 45 and above," it said.

People aged 45 and above accounted for more than 30 percent of China's population in 2012, with over 200 million above the age of 60 by the end of 2013, Citigroup said.

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While the top five multinational pharmaceutical players in the anti-cancer drug market -- Roche (Swiss Exchange: ROG-CH), Sanofi (Euronext Paris: SAN-FR), Novartis (Swiss Exchange: NOVN-CH), AstraZeneca (London Stock Exchange: AZN-GB), and Pfizer (NYSE:PFE - News) -- took more than 35 percent of China's cancer treatment market last year, Citigroup expects some domestic players, such as CSPC Pharma and Sino Biopharm, will also offer investors the chance to capture cancer growth opportunities.

Citigroup isn't alone in seeing opportunities in betting that more of the world's aging population will be getting sick.

Read More What GSK's new cancer deal shows about pharma market

"The importance of the silver dollar will grow as the over-50s become the fastest-growing demographic globally," Bank of America-Merrill Lynch (NYSE:BAC - News) said in a note earlier this month, calling the "longevity economy" a $15 trillion opportunity.

"Ageing-associated diseases or 'diseases of the elderly' are the primary cause including cardiovascular disease, cancer, and Alzheimer's. The incidence of all of these diseases increases rapidly with ageing, and sometimes exponentially, as in the case of cancer," it said.

In addition to investment opportunities in treating those illnesses, Bofa sees aging-related opportunities in the drug store industry.

"Seniors are the largest consumers of healthcare and prescription drugs with the average American aged 65-79 receiving an average of 27 prescriptions per person," it said, citing data from healthcare data provider IMS indicating global pharmacy sales will likely reach $1.2 trillion by 2017.

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U.S. prescription demand is expected to rise from $262 billion in 2013 to $455 billion by 2020, Bofa said, citing drug-store industry data.

Bofa also tipped the global hearing aid market will grow by around 2-5 percent every year by volume, with the $1 billion cochlear implant market to see around 10-15 percent growth every year.

It also sees opportunities in healthcare real estate, including senior housing, nursing homes, hospitals and medical office buildings. It noted the "big three" real-estate investment trusts (REITs), Health Care REIT (NYSE:HCN - News), HCP (NYSE:HCP - News) and Ventas (NYSE:VTR - News), have invested across various asset classes.

-By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1

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