In a STOLI arrangement, the beneficiary is typically:

In a STOLI arrangement, the beneficiary is typically:

• A. A person with insurable interest at issue.
• B. A person with no insurable interest at issue.
• C. The insurer.
• D. The policy owner's employer.

Answer: (B)

The main idea here is insurable interest in life insurance. In a STOLI arrangement, the goal is to profit from the death benefit by having someone with no legitimate stake in the insured’s life stand to receive the payout. That's why the beneficiary is typically a person with no insurable interest at issue—often a stranger to the insured who has no meaningful financial or familial connection. The insurer isn’t the beneficiary, and the policy owner’s employer isn’t the typical beneficiary in these schemes. The whole point of STOLI is to place the benefit with someone who lacks insurable interest at the time the policy is issued.

The main idea here is insurable interest in life insurance. In a STOLI arrangement, the goal is to profit from the death benefit by having someone with no legitimate stake in the insured’s life stand to receive the payout. That's why the beneficiary is typically a person with no insurable interest at issue—often a stranger to the insured who has no meaningful financial or familial connection. The insurer isn’t the beneficiary, and the policy owner’s employer isn’t the typical beneficiary in these schemes. The whole point of STOLI is to place the benefit with someone who lacks insurable interest at the time the policy is issued.