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  1. #1
    Join Date
    Jan 2012
    Posts
    1

    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?

  2. #2
    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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