Chicago, IL, December 10, 2011 --(PR.com
)-- Online life insurance quote provider YourLifeSolution.com is offering an explanation to seniors of the dangers of utilizing stranger own life insurance arrangements and life settlements.
Many life insurance settlement scams operate under the premise of “STOLI,” or stranger owned life insurance. A senior will purchase life insurance from a provider because said provider said they will then take ownership of the policy at a later time and pay the insured for the policy. Besides the obvious reasons why many would not want a complete stranger owning life insurance on their life, there are numerous other legal issues. One involves the fact that nearly all life insurance companies forbid this practice at the time of application and to do so anyway could put you at odds with them.
The owner of YourLifeSolution.com, Eric Smith, had this to say of life settlement providers offering money for your life insurance policy with few questions or underwriting, “If a company, or life settlement broker, is willing to offer you an immediate amount of money for your life insurance policy without knowing much of anything about your health, then you are likely looking at a very poor offer. To get a competitive offer on a policy typically requires extensive underwriting and a bidding process amongst interested parties.”
Life settlements are becoming a more regulated industry throughout the United States due to numerous complaints over the last decade of fraud and and malfeasance within the industry. Eric Smith makes the point that while the industry doesn’t have a spotless reputation and settlements are normally not a better option that simply holding on to the policy, there are a few situations where they are mutually beneficial. “There are scenarios where the insured doesn’t need the coverage at all or can get a better deal than they currently have on their coverage and in these scenarios a life settlement can be quite a valuable financial instrument. These however are rare cases as most people become less healthy as they age,” said Eric Smith.
YourLifeSolution.com states that seniors need to be aware that it’s often not in their best interest or their family’s to trade a tax-free fortune upon their death for a smaller taxed fortune during their life.