Life Insurance Companies Praise Efforts to Protect Seniors

A group representing the nation's life insurance companies is praising legislative efforts in several states to crack down on what is known as stranger-originated life insurance (STOLI). A group representing the nation's life insurance companies is praising legislative efforts in several states to crack down on what is known as stranger-originated life insurance (STOLI).

According to the American Council of Life Insurers, Vermont, Nevada and Minnesota have recently passed legislation that reduces economic incentives for unscrupulous agents to pursue STOLI transactions.

The group says that financial speculators and hedge fund representatives will induce senior citizens to buy life insurance they would not otherwise purchase, with an eye on transferring the benefits to them upon death. Speculators are said to pay for the premiums and then hope to profit upon the death of the seniors, with profits tending to run higher the sooner a person dies.

"STOLI transactions are fraudulent, and the seniors caught up in these schemes face unexpected taxes, loss of privacy and legal liability. The speculators promoting STOLI may induce the seniors to lie on policy applications, and sign their names to the lie, just so the speculators can reap huge profits," said ACLI president Frank Keating.

The organization adds that a total of 21 states have now passed anti-STOLI measures, which can give seniors further confidence in their life insurance companies. For life insurance rates that won't cause you stress, visit InsureMe.com.