- 2,121
Don’t gamble on grandma, N.J. court says in life insurance dispute
On Tuesday, the New Jersey Supreme Court waded into the battle to settle legal questions regarding “stranger-originated life insurance policies," — known in the insurance world as STOLIs.
So in case you were wondering: No, you cannot take out a hefty life insurance policy on a relative today and sell it to some investors in a few weeks.
That’s not an insurance policy, the state’s high court ruled.
That’s gambling on grandma’s life.
“Betting on a human life in that way, with the hope that the person will die soon, not only raises moral concerns but also invites foul play,” Chief Justice Stuart Rabner wrote in the opinion.
Thirty states have laws explicitly banning STOLI policies, but New Jersey is not among them. Still, state law requires someone taking out a policy on another person’s life to have an “insurable interest” in their well being.
On Tuesday, the New Jersey Supreme Court waded into the battle to settle legal questions regarding “stranger-originated life insurance policies," — known in the insurance world as STOLIs.
So in case you were wondering: No, you cannot take out a hefty life insurance policy on a relative today and sell it to some investors in a few weeks.
That’s not an insurance policy, the state’s high court ruled.
That’s gambling on grandma’s life.
“Betting on a human life in that way, with the hope that the person will die soon, not only raises moral concerns but also invites foul play,” Chief Justice Stuart Rabner wrote in the opinion.
Thirty states have laws explicitly banning STOLI policies, but New Jersey is not among them. Still, state law requires someone taking out a policy on another person’s life to have an “insurable interest” in their well being.
