Stranger Originated Life Insurance
Encyclopedia
A stranger-originated life insurance (STOLI) is a life insurance
arrangement, in which a stranger initiates an insurance policy against someone's life and makes the premium payments. The stranger may do this as investment for himself or on behalf of an investor, or at his own risk for the purpose of reselling the policy to an investor. The STOLI may require the cooperation of the insured, for example for allowing access to medical records; the insured may get a fee for this.
A similar arrangement is known as Spin-Life.
Life insurance
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...
arrangement, in which a stranger initiates an insurance policy against someone's life and makes the premium payments. The stranger may do this as investment for himself or on behalf of an investor, or at his own risk for the purpose of reselling the policy to an investor. The STOLI may require the cooperation of the insured, for example for allowing access to medical records; the insured may get a fee for this.
A similar arrangement is known as Spin-Life.