Legal Analysis Of The Transfer Of Life Insurace Policies In America And Its Reference Significance For Chinese Law

The claimants for compensation for death in life insurance policies are beneficiaries,not the insured.Being alive,the insured cannot get the compensation for death which could improve one’s life quality in the last stage of life.When the policy holders’ financial situation starts to deteriorate,it is possible that the policy holders cannot afford the subsequent insurance premium,in which case,the policy holders have no choice but receive the fact that the insurance company will void the policy and just return them the insurance premium paid before.Unfortunately,the amount of the returned premium is much lower than the value of the policy.Currently,policy holders can get some of its death compensation when they have serious diseases.But,there are many kinds of diseases are not included in range of payments.However,America has developed solutions called viatical settlement and life settlements.The investors give the policy holder a relative higher payment than insurance company and will pay the subsequent premium for the policy holders.In the return,the policy holders change the investors as his policy’s beneficiary.In America,the transfer of life insurance policy has witnessed many form changes,from viatical settlement to life settlement to securitization.NAIC and NCOIL have persistently revised Model Act and Model Regulation to form a relatively complete and operable way of transfer of life insurance policy.Meanwhile,some emerged problems became research focus,mainly concentrating on three significant parts.First of all,It is necessary or not for the transferor to have insurance interest when he/she transfer the policy.Secondly,It is necessary or not for the life insurance company to apply incontestability clause.It is necessary or not for the life insurance company to return premium when the policy was invalid of fraud.Under the circumstance of law of United States is relatively loose and vague in this field,the state laws detailed the Model Act and Model Regulation on the basis of their own practical situation.The current operation model of life insurance in our country shares much similarity with the background when the transfer of life insurance emerged in America.Many economists estimated our country has practical need of transfer of life insurance policy and called for statute provision to regulate the transfer.Taken the actual demand of viatical settlement and life settlement and the legislative blank in our country into consideration,this paper will show the form transition,operational systems and existing problems from viatical settlement to life settlement.By the research of legislative background,intent and content of the model act,state law and federal law,this paper will emphasize on the existing core dispute with case study.Given that the difference of China and America’s national condition,this paper will selectively give our country some legislative suggestions about how to operate and govern viatical settlement and life settlement.