I think you can count on seeing this type of stance from more and more companies. Protective sent a memo out to agents today stating, “Protective Life Insurance Company will not issue life insurance policies planned to be re-sold in the secondary market, often referred to as Stranger Owned Life Insurance (SOLI) or Investor Owned Life Insurance (IOLI).
These types of secondary market arrangements are not within our underwriting criteria, and we will return any applications for policies that are either directly or ultimately intended to be part of such an arrangement. If such a case is inadvertently underwritten, upon our discovery we may refund the premium and rescind the policy.”
Bottom line. They aren’t the first major company to take a hard line on discouraging life settlements and you can bet they won’t be the last. Let’s hear it for prudent and reasonable.