Zero Premium Life ?????

InsureBlog posted a warning about a new product called zero premium life that is being promoted to agents right now, mostly for sale to seniors.

On the surface it sounds great! Here is the scenario. A company will pay for the premiums for a life insurance policy with a face value of $50,000. The applicant for the life insurance policy (i.e. a senior citizen) will have coverage for $15,000 upon death. This is a good amount to cover funeral expenses, settle debts, etc. The company that pays the premiums will get $35,000 in return for paying the premium.

The only problem here is something called insurable interest. Any new life insurance agent learns that a beneficiary of a life insurance policy must have an insurance interest. In other words, you can leave your life insurance to your wife, kids, business parter, etc....somebody who will be affected by your death. You cannot leave your life insurance to a complete stranger on the street. Imagine if you could!

I would imagine the number of 'accidents' or murders would increase. Now I'm not saying that zero premium life fronts a bunch of murderers or anything, but I'm am saying that it looks illegal in the US!

Now go find out how much life insurance costs. It's not that expensive. Pay for it, and know that it's real!