I am researching the issue of stranger-originated annuity transactions (STATS) and I’m not an econ major… in fact, I have never taken econ in my life, but I am really interested. It seems as though not all firms offer the death clause, or maybe just not all contracts include the death clause. What will happen if strangers are no longer allowed to be beneficiaries? Really, that would make it difficult for someone to name their girlfriend or best friend, right?
Please clarify some of these issues! Thank you 
Chosen Answer:
Honestly I think the issue of stranger originated annuity transaction would not apply to someone you know. How this works is the stranger finds a terminally ill person, gives them a little money upfront and purchases an annuity where the stranger receives the money when the person dies. The terminally ill person gets nothing else and has no entitled. This is not the same as John Doe buying an annuity for investment purposes and leaving it to his best friend because he has no one else left in his life. These people are purchasing annuities for unlegitimate reasons.
You might be able to find at least some of your answers here. http://www.sec.gov/investor/pubs/varannty.htm
http://www.finra.org/Industry/Issues/VariableAnnuities/
http://www.marketwire.com/press-release/Life-Settlement-Industry-Opposes-Stranger-Originated-Annuities-1159377.htm
http://www.naifa.org/newsevents/releases/20100520_naic.cfm
by: dawn_19026
on: 19th November 10
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Honestly I think the issue of stranger originated annuity transaction would not apply to someone you know. How this works is the stranger finds a terminally ill person, gives them a little money upfront and purchases an annuity where the stranger receives the money when the person dies. The terminally ill person gets nothing else and has no entitled. This is not the same as John Doe buying an annuity for investment purposes and leaving it to his best friend because he has no one else left in his life. These people are purchasing annuities for unlegitimate reasons.
You might be able to find at least some of your answers here. http://www.sec.gov/investor/pubs/varannty.htm
http://www.finra.org/Industry/Issues/VariableAnnuities/
http://www.marketwire.com/press-release/Life-Settlement-Industry-Opposes-Stranger-Originated-Annuities-1159377.htm
http://www.naifa.org/newsevents/releases/20100520_naic.cfm
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