An investor offers to pay you a fee to purchase
life insurance you otherwise would not buy. The
investors (strangers) then pay all of the premiums in
exchange for being named beneficiary on the policy. When you
die, your loved ones receive no benefit. The sooner you die,
the more money the investors will make.
Stranger/Investor Originated Life Insurance
transactions are illegal in Ohio. STOLI schemes
take advantage of legal life settlement transactions where
you are paid a lump sum amount – usually greater than you
insurance policy’s cash surrender value – for a life
insurance policy you no longer need.
Unlike a traditional policy where the insured's loved ones
are beneficiaries of the death benefits, in a STOLI
arrangement, an investor group (strangers) will likely
acquire an interest in the life of a participant.
HOW CAN CONSUMERS PROTECT THEMSELVES?
A life settlement or STOLI transaction may seem like an
easy way to make some extra money, but be wary if you are
approached by someone who offers to fund a policy for you.
Before selling your policy or agreeing to let someone fund
one for you, consult a trusted advisor or contact the Ohio
Department of Insurance (1-800-686-1526 or
Participation in a STOLI transaction – or a life
settlement – may affect the participant’s ability to
purchase additional needed life insurance in the future.
Participation may also result in higher premiums for
additional coverage and/or tax liabilities.
If you participate in a STOLI transaction, you could face
HOW TO REPORT IF YOU’VE BEEN A VICTIM
Ohio Department of Insurance Fraud Hotline:
If someone approaches you and offers you money so they can
take out a policy in your name, call 1-800-686-1527.
For more information on preventing senior scams, visit these
U.S. Department of Health & Human Services and U.S.
Department of Justice –
Copyright 2011. Hamilton County Ohio. 138 E. Court Street, Cincinnati, OH 45202.
Information on this site is for informational purposes only and is believed to be true and accurate. This information should not be considered as legal advice and Hamilton County disclaims any liability for errors or omissions. External links to other sites are intended to supplement information on this website and do not have the endorsement of Hamilton County.