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Illinois Issues STOLI Warning

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The Illinois Division of Insurance has issued a notice advising consumers to proceed with caution when thinking about entering into “stranger-owned” life insurance arrangements.

“The division does not sanction or approve STOLI arrangements,” officials say in the notice. “These transactions and parties to these transactions may be subject to the Illinois Insurance Code and other applicable laws of the state of Illinois.”

The investors who invest in the arrangement could profit from the death of the insured, officials note.

In some cases, “insurance companies may refuse to pay benefits on STOLI arrangements,” officials warn.

A copy of the warning is available


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