Stranger Originated
Stranger originated life insurance or STOLI is a life insurance policy that is held or financed by a person who has no relationship to the insured person. Generally, the purpose of life insurance is to provide peace of mind by assuring that financial loss or hardship will be alleviated in the event of the insured person's death. STOLI has often been used as an investment technique whereby investors will encourage someone (usually an elderly person) to purchase life insurance and name the investors as the beneficiary of the policy. This undermines the primary purpose of life insurance, as the investors would incur no financial loss should the insured person die. In some jurisdictions, there are laws to discourage or prevent STOLI.
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Famous quotes containing the words stranger and/or originated:
“If, for instance, they have heard something from the postman, they attribute it to “a semi-official statement”; if they have fallen into conversation with a stranger at a bar, they can conscientiously describe him as “a source that has hitherto proved unimpeachable.” It is only when the journalist is reporting a whim of his own, and one to which he attaches minor importance, that he defines it as the opinion of “well-informed circles.””
—Evelyn Waugh (1903–1966)
“If we glance at the most important revolutions in history, we see at once that the greatest number of these originated in the periodical revolutions of the human mind.”
—Karl Wilhelm Von Humboldt (1767–1835)