Stranger originated

Stranger originated

 Stranger originated life insurance or STOLI is a life insurance policy that is held or financed by a person who has no relationship to the insured. In general, the purpose of life insurance is to provide peace of mind by ensuring that financial loss or difficulties are alleviated in case of death of the insured. STOLI has often been used as an investment technique that investors will encourage someone (usually an elderly person) to purchase life insurance and name the investors as the beneficiary of the policy. This undermines the primary purpose of life insurance as the investors will not incur financial losses of the insured's death. In some countries, there are laws to discourage or prevent STOLI.