Tuesday, September 23, 2008

Seniors and Life Insurance Scams

Senior citizens are the target of many scams these days including life insurance. You would think that anyone could buy life insurance without worrying about being caught up in some type of scam but unfortunately, there seems to be a scam for everything. This is something that all Canadians should be aware of and on the watch for. No one wants to be the victim of a scam but taking advantage of the death of a senior citizen is a horrible thing.

Life insurance scams for seniors have become such a problem that many states are trying to fight back. In this article you can read about how a new Ohio law bans life insurance scams from making money off of the death of their senior citizens. This law bans the use of STOLI transactions. STOLI stands for Stranger Originated Life Insurance and it allows anyone to invest in a life insurance policy of someone else that they don’t even know.

By investing in this policy they are entitled to the cash benefit of the life insurance when that person dies. The senior citizen is tricked into thinking they have a free life insurance policy that will benefit their family when in reality the benefits will go to the scammer. Companies that sell life insurance are required by this law to ask certain questions that will help identify scams. A five-year waiting period is mandatory in cases where a STOLI scam is suspected.

Ohio wanted to put a stop to this type of scam before it gets started in their state and it is something that everyone needs to be aware of, including Canadians. The first step in preventing seniors from being taken in by scams is knowledge. Everyone, including Canadians should learn as much as they can about the scams that affect senior citizens to help ensure they are not taken advantage of.


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