Daily Journal (California) | April.19.2012
This article, authored by Los Angeles litigation partners William Molinski and Khai LeQuang, discusses insurance companies' attempts to invalidate potentially billions of dollars in life insurance policies they issued years ago. An excerpt from the article is included below.
Insurance companies today are going to court to try to invalidate millions, and potentially billions, of dollars in life insurance policies they issued years ago. What's more, they're asking courts to let them pocket millions of dollars in premiums they collected over the years, leaving their policyholders with nothing, and in the process giving themselves a massive windfall for writing policies they now claim are illegal.
These policies were originally purchased by consumers and then sold to investors on the secondary market. Selling one's life insurance policy can be a good deal for anyone who is financially strapped, or simply looking to monetize their life insurance. Over the past decade, consumers came to realize that an emerging secondary market for life insurance greatly enhanced the value of a life insurance policy, and many of them purchased life insurance with the idea they might one day sell their policies to an investor for a profit.
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