Stranger Originated Life Insurance

Stranger Originated Life Insurance

Stranger oriented life insurance is when a life insurance policy is initiated and funded by speculators.  What happens is elderly people, who are essentially expected to pass away soon enough, are used by a third party, not related to the elderly person, to get a life insurance policy taken out on the elderly person.  Once the insurance policy is taken out the speculator then pays them, or loans them the money to pay for the premiums and then at a later date the speculator buys the insurance policy.  So what ends up happening is the elderly person is used to get life insurance that otherwise wouldn't be accessible to the speculator.  In some stated, this is illegal and in many cases the insurance companies are fighting back because they stand to lose money if many people are buying and keeping large life insurance policies. 

Stranger Originated Life Insurance Legal Issues

Whether or not this will become completely illegal everywhere is yet to be seen.  As for insurance companies, there will probably be a number of steps that they will take to insure that this doesn't happen much, if at all.  Whether this is through changing future policies and/or through suing people involved in these sort of deals based on preexisting guidelines, conditions and terms.

If You Want to Know More

If you want to know more, please contact your insurance company or an insurance agent with any question as this is a highly controversial topic and laws, terms and practices are likely to change or have already changed.