Re: Life Insurance premium paid by broker
It is illegal and for an agent to pay premiums on a client with no insurable interest in the client. Further, most insurance carriers ask the client to declare the source of the funds for premiums. Failure to answer completely and truthfully is considered insurance fraud. Finally, most carriers ask if there have been any discussions or any plans to sell the policy. Again, failure to answer completely and truthfully is considered insurance fraud. What is being proposed to you is probably an illegal attempt to circumvent the 2 year contestability clause in life insurance policies. Do not get involved. The safest option now is for you to report the proposal to your State Insurance Commissioner.