Stranger-Owned Life-Insurance (STOLI) Scheme:

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Stranger-Owned Life-Insurance (STOLI) Scheme:

Definition

An arrangement in which someone who does not know the person insured under a life-insurance policy and lacks an insurable interest in it nonetheless becomes an investor in the policy with an ownership interest or an interest in the proceeds. Most American jurisdictions prohibit STOLI schemes, considering them to be illicit wagers on someone else’s life.

Related rules

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— Sun Life Assurance Company of Canada v. Wells Fargo Bank

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