Third-Party Ownership and Life Settlements
Chapters in this video
What this video covers
- How the policyowner, insured, and beneficiary roles differ, and which contractual rights the owner may exercise
- When insurable interest and a genuine family or business purpose support third-party ownership
- How stranger-originated life insurance (STOLI) and investor-originated life insurance (IOLI) differ from legitimate ownership, and why state law controls their treatment
- How a life settlement transfers an existing policy to a buyer, while surrender ends the policy with the insurer
- How to calculate net settlement proceeds by subtracting seller fees from each offer
- How a settlement may affect privacy, taxes, creditors, and means-tested benefits such as Medicaid
- Why the policy's surrender value does not determine an outside buyer's life settlement offer
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This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Life and Health course also includes adaptive practice questions and spaced-repetition flashcards, available in Free Beta.