Washington – S.F. 2392, a bill intended to help protect senior citizens from a stranger-originated life insurance (STOLI) policy, has passed the Iowa State Legislature and is now awaiting the Governor’s signature.

In STOLI transactions, investors or their representatives induce seniors to purchase life insurance for the sole purpose of selling the death benefits to the investors. The investors plan to profit when the seniors die, and the sooner the seniors die, the higher the profit. In most cases, the seniors who sign the policy applications must mislead the insurance company about their intention to sell the policy to the investors. Seniors who participate in these schemes may face unexpected taxes and fees, loss of privacy and legal concerns.

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