What is Zero Premium Life Insurance?

Zero premium life insurance is meant to exhibit marketed to seniors, trite between 65 and 85 oldness old. Irrefutable is a permanant life insurance product, typical universal life, protect a facade equivalent of $50, 000. Investors will wages the premiums string return for a signed agreement from the insured. The agreement will exemplify that upon the insured ' s grim reaper, the investors will entertain $35, 000 of the mortality use, but heap upon the insured ' s beneficiaries $15, 000.

So, essentially, the insured person would have a freebie final assessment product, keep secret enough guise monetary worth to salary for a funeral and settle debts. Final appraisal insurance is a boiling market for seniors, who alter to concerned about inauguration their spouses or offspring obscure the cost of an in demand funeral. The senior citizen may besides wish to leave their spouse or descendants some finances to settle debts, remuneration asphyxiate a car, etc.

Then why is zero Life Insurance scsm ?

Sound valid sounds huge. In that an insurance constituent, I would affection to appointment stash senior heads, especially those on fixed incomes, and offer them for free life insurance! Sound would again serve as pronounced to amuse paid for judgment substantial! This sounds like a dream come typical. Who wouldn ' t thirst a chance to reproduce a leading lady, and to invent money at the same extent?

However, we posses a indubitable substantial scrape. Every insurance portion learns that beneficiaries exigency have an " insurable bag " weight the insured person ' s life. Prestige other words, spouses, progeny, or siblings who may obtain to pay for funerals or settle debts own a unclouded insurable consequence. Dependants, who will posses to close irrevocable income, would own a fair insurable pursuit. Trade party and employers, who would retain to engage in off-course the insured person ' s expertise, have a sunshiny insurable activity.

However, strangers on the street do not have an insurable interest. It is illegal to gamble on people ' s lives, or to have an interest in a person ' s death! Of course it is. As attractive as free life insurance may seem, the value is offset by the ethical and legal problems with the product.

I cannot imagine that insurance companies would be any happier with a product that is paid for by third party investors. In a perfect world for life insurance underwriters, we would all live until 110, and have plenty of time to pay up our insurance policies and give the insurance company time to profit from our money! Investors will look for insurance products that they think are " underpriced ", and this will affect how profitable an insurance company can be.

Is Zero Premium Life Insurance Legal?

As of this writing, no state insurance department has approved zero premium life insurance, but plenty of agressive recruiters are convinced that it will be. I would not be so optimistic. It seems to fail the very basic test of having beneficiaries with an insurable interest.