Don’t gamble on grandma, N.J. court says in life insurance dispute

Jun 5, 2019

  1. Northeast Agent
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    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.
     
  2. adjusterjack
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  3. Life Hawk
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    Would it be considered gambling if the "house" places the bet? :err:
     
  4. Markthebroker
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    Lol, well played Life Hawk. Well played.
     
  5. ICACharleston
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    ICACharleston Super Genius

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    No, cause the house only wins as long as she lives and pays premiums.
     
  6. rousemark
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    rousemark Still Here!

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    BUy the policy on grandma, sell it off to a mob backed loan company...Not gamble there, the mob is guaranteed to collect before premiums exceed the face... :yes:
     
  7. Tahoe Ray
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    I'm really surprised that only 30 states have banned STOLI and that NJ wasn't one of the first.

    I could be off but I think NY was one of the original states banning STOLI and to not have NJ on board basically must have lent itself to cross-border sales.

    "Here's your 50k Agnes for doing this life application and exam. Oh, and here's $19 bucks to cross the Verrazzano and another $15 to come back to NY."

    Nice...house always wins.
     
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