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Old 01-17-2012, 02:31 PM
cjb cjb is offline
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Join Date: Jan 2012
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Life Insurance premium paid by broker

Is it legal for the Life insurance agent/broker to make a deal with you and pay for the premium then sell the insurance after 2 yrs and then get the premium back and give you a rebate?

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Old 01-18-2012, 08:23 PM
wghholtrad wghholtrad is offline
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Join Date: Dec 2006
Posts: 25
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.

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