Life Settlement Legal News



Transcript

Hi I’m David Mickelson from Mickelson Capital Consulting,

Today we are going to speak about life settlements and a legal case that was recently decided by the Fourth Circuit Court of Appeals. And In this action, First Penn Insurance Company is appealing a lower court decision that they lost. The insurance company was trying to get permission to cancel an existing life insurance policy on the grounds that the insured had planned to sell the policy at the time he applied for it.

The insurance company’s central argument was that there was no insurable interest because the insured already hatched a plan to resell the life insurance when he applied for the coverage. The insurance company’s position was that a plan to sell the policy at the time of application made it cancellable by the insurance company because of a lack of insurable interest.

Now, the appeals court decided that the original court decision that the policy was in good standing and could not be cancelled just because of the plan to sell it. The court said that an intent to transfer the policy doesn’t alone destroy the insurable interest. A third party must be involved in the procurement of the policy to eliminate insurable interest.

Well as a non-attorney, I can’t make any legal judgments about how this will play out. But what I can say is there’s a lot more clarity today and guidance about what the rights of policy holders are, than there was before this court decision that came out really just in late February.

To learn more about this case, it’s the Fourth Circuit Court of Appeals Case #07-2020. Also there’s a copy on our website. The Mickelson Capital website dealing with life insurance and life settlements is: www.mickelsonlife.com.

With that, thanks for watching, and good day!

 

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