Stranger Originated Life Insurance

I am writing about this one because it illustrates vividly the fraudulent nature of stoli transactions. 1 the primary market for new life.

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Stranger originated also known as stranger owned or stranger initiated life insurance is a plan or arrangement designed from the outset to put a life insurance policy into the hands of investors or speculators.

Stranger originated life insurance. Stranger originated life insurance is effectively illegal in most countries because by law the originator of a life insurance policy must have an insurable interest in the insured. Stranger originated life insurance stoli is not a type of life insurance product. There have been many stoli lawsuits and i have written about a few of them.

Stranger originated life insurance stoli is a scheme pursuant to which someone purchases life insurance on the life of another for whom the purchaser does not have an insurable interest on the life of the insured. In a common variant of the scheme a trust set up by the insured will purchase and own the insurance. Stranger originated life insurance policies or stoli policies have been in the news lately leading many senior citizens and life insurance policy holders to wonder what it is and why its illegal in some states.

It is instead a marketplace term for a transaction that came into being roughly 3 years ago and which makes use of three legitimate but otherwise separate financial markets namely. Sun life assurance company of canada recently won a partial victory in a lawsuit relating to stranger originated life insurance stoli. Florida insurance officials are raising the alarm about a growing and controversial niche of the secondary life insurance market known as stranger originated life insurance stoli policies.

A way around this law is to have an individual take out a life insurance policy on themselves and then have the insured subsequently sell the policy to a third party. Stranger originated life insurance stoli generally means any act practice or arrangement at or prior to policy issuance to initiate or facilitate the issuance of a life insurance policy for the intended benefit of a person who at the time of policy origination does not have an insurable interest in the life of the insured under the laws of the applicable state. Stranger owned life insurance stoli or stranger originated life insurance is a way to bypass the insurable interest requirement of purchasing life insurance.

Generally the purpose of life insurance is to provide peace of mind by assuring that financial loss or hardship will be alleviated in the event of the insured persons death. Unsuspecting seniors nationwide could be lured into committing fraud and losing their ability to ever get life insurance again. Stranger originated life insurance or stoli is a life insurance policy that is held or financed by a person who has no relationship to the insured person.

What Is Stranger Originated Life Insurance

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