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What is Zero Premium Life Insurance?
zero premium life insurance is marketed to the elderly, probably 65-85 years. This is a permanent life insurance, probably, universal life energy, with a face value of $ 50,000. Investors will pay the premium in exchange for an agreement signed by the insured. The agreement indicates that the insured person dies, the investors will receive $ 35,000 of death benefit, but giveInsured beneficiary $ 15,000.
So basically, if the insured cost free end product, with enough to pay face value for a funeral and pay their debts. final cost of insurance is a hot market for the elderly to leave their spouse and children are the cost of an expensive funeral. Older people can also leave their spouses or children of some money to settle debts, pay for a car, etc.
Why is it free life insurance Bad?
Well, it looks great. As an insurance agent, I'd like to visit with the elderly, especially those with fixed incomes, and to offer them life insurance free! Would also be nice to get paid for it! That sounds like a dream come true. Who does not want the opportunity to be a hero and make money at the same time?
However, we have a very big problem. Every insurance agent learns that the beneficiaries of an "insurable interest" in the insured person are> Life. In other words, spouses, sons or brothers who may be paid or paid funerals have a clear insurable interest. Members who must do without income would be a clear insurable interest. Business partners and employers, the insured must do without the person's know-how would have a clear insurable interest.
However, not strangers on the street no insurable interest. E 'illegal to play lives of men, or have an interest in aPerson to death! Of course it is. attractive life insurance can seem so free, the product value is offset by the ethical and legal problems with that.
I can not imagine that the insurance company would be happy with a product paid for by third party investors. In a perfect world for life insurers, we would all be at the 110, and have time to pay our insurance and to give the insurance period, you will benefit from our money!Investors seek to insurance products that think "undervalued" and that will affect how profitable an insurance company can.
Zero Premium Life Insurance is legal?
As I write this, the State Department of Insurance has approved the zero premium life insurance, but much more aggressive recruiters are convinced that it will be. I would not be so optimistic. It seems that fail basic tests of recipients with an insurable interest.
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