What
is STOLI?
STOLI stands for
Stranger Originated Life Insurance. STOLI is the
initiation a life insurance policy for the benefit of a
person who, at the time of the creation of the policy, has
no insurable interest in the insured. Trusts that are
created to give the appearance of insurable interest and
used to initiate policies for investors also violate
insurable interest laws and are STOLI. STOLI is not a Life
Settlement.
(read
more on the difference between STOLI and life settlement)
Although STOLI is the
mainstream term for stranger originated life insurance
transactions, other terms have been used to describe this
practice such as:
SPINLIFE
Speculator Initiated Life Insurance
SOLI
Stranger Originated Life Insurance
IOLI
Investor Originated Life Insurance
