Seniors Swindled by 'Spin Life' Insurance

Some life insurance policies are starting to haunt the living. Three years ago, I said "premium financed" policies were "not exactly a scam, but dangerous." Today that warning seems like an understatement.

More than $20 billion of these so-called "spin life" insurance policies have been sold and now they're starting to implode. Many policy holders don't realize the trouble they face.

The concept seemed straightforward when sales were rampant several years ago. Agents promised clients that investors would lend them money to pay the premiums for the first two years, until the policy was past the "contestability period." Then the policy would be sold to an investor, who would continue to pay the premiums, hoping to collect on this "bet" on the senior's longevity. ...