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Difference between revisions of "Stranger Originated Life Insurance"

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A stranger purchases a life insurance policy against another's life and fund the premium payments. The stranger may do this as investment for himself or on behalf of an investor.
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Stranger originated life insurance (known as STOLI) is when a stranger purchases a life insurance policy against another's life and funds the premium payments. The stranger may do this as investment for himself or on behalf of an investor.
  
 
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Revision as of 15:17, 29 June 2010

Stranger originated life insurance (known as STOLI) is when a stranger purchases a life insurance policy against another's life and funds the premium payments. The stranger may do this as investment for himself or on behalf of an investor.

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Contents

Overview

STOLI, or stranger-originated life insurance, exists when a third party purchases life insurance issued on the life of someone else. The new owner could be one person or one entity. The third party pays the premium until the insured's death and receives the life insurance benefit when the insured dies.[1]

The target demographic for insured parties is typically senior citizens, ages 65 to 85.[2]

The return on investment for this financial arrangement is appealing because it's not dependent on the stock market or the insured financial performance.[3]

Legal Developments

References

  1. http://www.livesettlements.net/blog/the_stranger_among_us_betting_on_strangers_life_expectancies/54
  2. http://www.livesettlements.net/blog/the_stranger_among_us_betting_on_strangers_life_expectancies/54
  3. http://www.livesettlements.net/blog/the_stranger_among_us_betting_on_strangers_life_expectancies/54

External Links

Related Resources on FindLaw

Related Blogs on FindLaw

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See Also

Contributors

FindLaw Nira, FindLaw Sarah