Clean Sheeting

Clean Sheeting

The fraudulent act of purchasing a life insurance policy without disclosing a pre-existing terminal illness or disease. This type of fraud is often done with both the knowledge of the purchaser and the agent involved.

Notes:

The policy is often sold shortly after the policy is bought in a viatical settlement but the money received is a lot less than the usual amount in a legitimate settlement. This is because there is a higher chance the policy will be rescinded due to the fraud. This type of fraud provides huge gains for the person who buys out the purchaser as they are buying it at a large discount, somewhere around 10% of the policy face value.

See also: Face Value, Life Insurance, Terminally Ill, Viatical Settlement, Viator