Spin-Life

Definition

• A financial arrangement where an entity convinces an individual to sell their existing life insurance policy or take out and sell a new life insurance policy to a third party. In a spin-life arrangement, a third party agrees to take on the insurance premiums on the promise that they will receive a death benefit; in exchange, the insured person will receive a lump-sum payment from the third party in advance of their own death. Also known as a "viatical settlement", "transferable insurance policy", or a "life settlement."

Synonyms
viatical settlement

Related Terms and Acronyms

• Accelerated Benefit Option — Definition,
  • An option that allows the insured to receive insurance benefits before they would ordinarily be available.
• Financing Entity — Definition,
  • An entity that purchases an insurance policy or settlement contract.
• Irrevocable Beneficiary — Definition,
  • A life insurance or segregated fund beneficiary whose benefit cannot be revoked or modified in any way without his or her consent.
• Life Insurance — Definition, Very Important,
  • An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
  ➥ CanEquity offers life insurance.
• Loss Payee — Definition,
  • An entity that is legally entitled to the benefits of an insurance claim.
• Policy Loan — Definition,
  • A loan where a life insurance policyholder's death benefit is used as collateral.
• Revocable Beneficiary — Definition,
  • A beneficiary whose benefit can be modified without his or her consent.
• Stranger Originated Life Insurance (STOLI) — Acronym,
  • A life insurance policy purchased by someone without any insurable interests with the insured person.
  ➥ Illegal in many Canadian provinces.
• Surrender Rights — Definition,
  • The contractual right for a life insurance or annuity policyholder to cancel his or her policy.
• Transferable Insurance Policy — Definition,
  • A life insurance policy that can be sold to another party through a viatical settlement.
• Viatical Settlement — Definition,
  • A contract where an individual agrees to sell his or her life insurance policy to a third party before their death.
• Viator — Definition,
  • A person who agrees to sell his or her life insurance policy to a third party.