How To Buy Other Peoples Life Insurance Policies? 
Buying an existing life insurance policy on another person , presumably a stranger , in order to pay the premiums and then collect the eventual death benefit is called `` life settlement . '' This kind of investment is very risky and highly regulated in most states because it requires the investor to assess and then calculate how long somebody has to live and requires the investor to have enough money to pay the premium until that happens . For this reason , professional investors tend to pool their money so that they can buy many policies to spread the risk . In a way , this is a bet against modern medicine . On top of that , you have to wonder why somebody who has 10 or less years to live would not keep their policy so that their own family could reap the rewards , so all such investors have the risk that the person you are insuring is not as sick as they claim . Typically , life settlement investments are highly regulated and made available only to high net worth individuals who , through a prospectus describing the risks , are able to hold such an investment for many years , perhaps decades . I own shares of stock in a small public company called Imperial Holdings Inc. -LRB- IFT -RRB- and they own several hundred life insurance policies that will eventually payoff , however , huge premiums must be paid every year in order to keep those in force , so it 's risky . 