Life Settlement Lawyers:
Life Settlement Fraud
Life settlements, or viatical settlements, occur when an individual sells their life insurance policy for immediate assets. A life settlement investor buys the life insurance policy from someone who is typically elderly and/or in bad health. The individual could need cash for medical treatments, living expenses, or their family. Unfortunately, seniors are being unfairly convinced – or scammed – to sell their life insurance policy.
Garcia, Artigliere & Schadrack offer free, no-obligation consultations to people who believe they have been misled or victimized by life settlement investors. Being a victim of fraud is often difficult to understand and appalling. We can help clarify your rights, and advocate for your fair treatment to get you the compensation you deserve. Contact us at 1-800-251-8515 or schedule a free case review today.
How life settlement fraud works:
The investor buys the policy for less money than what the expected payout would be upon the death of the holder. The investor continues to make the premium payments, betting that the person will die soon. The investor collects most of the life insurance payout without investing much money in premiums.
Types of life settlement fraud:
- STOLI / SPINLIFE: This is short for “Stranger-Owned Life Insurance” or “Speculator Initiated Life Insurance”. STOLI or SPINLIFE occurs when a stranger convinces a senior to buy life insurance, to hold it for two years, and then to transfer the policy to the investor for an agreed-upon sum. This can create a conflict of interest, as the stranger has an interest in the senior’s early demise. Policies may not be in the seniors favor, and has adverse tax and additional life insurance consequences.
- Broker Fraud: In these cases, life insurance brokers accept commissions under the table from the life insurance company who wrote the policy in exchange for suppressing competitive bids from other companies. This violates the fiduciary duties of the broker and unfairly ensures that the senior policy holder gets less money for their policy.
- Premium Financing Scams: Premium financing is where a loan is taken out, using the insurance policy as the collateral for the loan. If the senior defaults on the loan, the lender has the right to take ownership of the policy. The lender offers the loan at an exorbitant interest rate. When the senior defaults on the loan, they are forced to give up their life insurance policy, which, upon their death, is worth far more than the original loan.
- Sell the Policy and Get a New One: There are brokers who convince elderly clients to make a life settlement and get a replacement policy. The broker makes a double commission, and the senior ends up spending more for the replacement life insurance because of their age and health.
What to do if you suspect you or a family member are victims of life settlement fraud:
You need a strong legal team with experience in life insurance settlements and life insurance settlement scams to guide you through this process and to fight for your rights. Stephen M. Garcia and his team of life settlement fraud attorneys at Garcia, Artigliere & Schadrack know how to fight life settlement investors and insurance companies to get you the compensation to which you are entitled. We are here to listen, contact us at 1-800-251-8515 for a free case review.
Life settlements are pitched as “free money.” For most people, life settlements are probably unsuitable and the advice to sell it often will be wrong.