This would be when a person who has no insurable interest, takes out a policy on your life without your knowledge. This a fraudulent practice. The idea would be to cash in on your death. It is illegal to purchase a life insurance contract on an individual unless you have some sort of insurable interest such as a spouse, a child, or a business partner, especially without their knowledge.
Co-Founder, Coastal Financial Partners Group, California
Stranger originated (also known as stranger-owned or stranger-initiated) life insurance is a plan or arrangement designed from the outset to put a life insurance policy into the hands of investors or speculators.
The overall intent of each of these transactions, no matter how arranged, is to cause the issuance of new life insurance on the life of the insured for the ultimate purpose of ownership by one or more persons who have no interest in the continuation of the insured’s life and have every interest in profiting by the insured’s early death.
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The overall intent of each of these transactions, no matter how arranged, is to cause the issuance of new life insurance on the life of the insured for the ultimate purpose of ownership by one or more persons who have no interest in the continuation of the insured’s life and have every interest in profiting by the insured’s early death.