By Jennifer Pierce, NEWS 9
Some state lawmakers are pushing a bill that would stop investors from preying on the elderly.
The investors are selling ‘free' life insurance policies, but lawmakers said there's nothing free about them.
Oklahoma lawmakers say Senate Bill 1980 is protecting seniors and want to be the first state to go after the brokers that sell life insurance policies, but seniors are worried the bill may not offer them full protection.
These seniors may not know it but they could be gambling away their life insurance policies.
"A senior is lured into buying life insurance on themselves and then at the end of the contestability period of the life insurance policy they then sell it to a broker," Sen. Sean Burrage (D) District 12 said.
The broker pays the premium and gets the death benefits. It's called STOLI or Stranger-Originated Life Insurance.
"It's a transaction we want to stop in the state of Oklahoma," Burrage said.
But some seniors want the option of buying or selling at any time.
"At 80-years-old, I have no income, resources or no additional income resources," Elizabeth Walker said. "So, if I could sell the policy even at say 50 percent of the face value, why not leave this an open commerce area? Why have a state law?"
Estate attorney, Bryan Evans also has problems with the STOLI bill.
"Many times you see a senior that has a life insurance policy and they become ill, well they need the money now," Evans said. "They need the money for health benefits, for health insurance, for medical care."
But lawmakers said they want what is in the best interest of elderly Oklahomans.
"Many times in these STOLI transactions, the seniors don't know what they're getting into, they don't know the tax implications," Burrage said.
The bill would only affect those who enter into a STOLI transaction and not someone who buys a policy and later decides they don't want it and sells it.
STOLI schemes have been reported in Florida and California. Only recently has the Oklahoma Insurance Commissioner received reports of it happening in the state.