Who would have thought that someone would want to find a way to financially exploit the ballooning demographic of people ages 65 to 85? Well, they have, and it’s very creepy.
The newest devious practice playing out today is what the Ohio Department of Insurance calls STOLI, which stands for, "Stranger/Investor Originated Life Insurance."
How STOLI works
According to the Ohio Department of Insurance, STOLI starts when a stranger/investor finds people ages 65 to 85 and offers them a cash incentive to agree to having a life insurance policy taken out on their behalf. The stranger/investor then chooses the beneficiary. Then, upon their deaths, the "investor" cashes in.
The problem isn't simply the ethics and morality of such behavior. It's the risk that life insurance may no longer be affordable for legitimate consumers to purchase—the very people life insurance was intended to serve.
Think about it. One policy is paid on one person. But when 10 people buy a life insurance policy on the same person, 10 people collect upon that person’s death. Payouts increase and revenue from life insurance premiums no longer supports the price of a life insurance policy. This fraudulent activity results in higher premiums, making insurance out of reach for some.
How to learn more
For more information about STOLI, how it works and the consequences it has for the future, come to the public forum from 2-4 p.m. Aug. 19 at the Erie County Office Building, 2900 Columbus Ave., next to the Erie County Fairgrounds. Attorney Bob Smith, with the Ohio Department of Insurance Fraud Division, will be making a presentation.
Seating is limited to 50, and an audience size of 15 or more is required to justify the travel by the speaker.
Call Serving Our Seniors at 419-624-1856 to RSVP.