Man with cancer can't sell policy for cash
The Tokyo High Court on Wednesday rejected an appeal by a man with liver cancer who wanted to resell his life insurance policy to raise money to pay for his treatment and living expenses.
"Allowing free trade of a life insurance policy would enable purchasing companies to make excessive profits by buying insurance policies at unreasonably low prices," presiding Judge Toshifumi Minami said in upholding the lower court ruling.
The 51-year-old plaintiff from Saitama Prefecture was diagnosed with liver cancer in 2002. He was having difficulty paying for his treatment and living expenses, so he decided to sell his life insurance policy.
The man signed a contract in December 2004 to sell the policy, from AIG Star Life Insurance Co., to Risk Management Institute Co. for 8.5 million yen. The Tokyo-based venture company was to receive about 28 million yen when the man died.
The contract stated the venture firm would give the 8.5 million yen in a lump sum and continue to pay the insurance premiums.
But in January 2005, AIG Star Life refused to change the names on the policy of the policyholder and beneficiary, which prompted the man to file the lawsuit.
The Tokyo District Court rejected the man's request in November, saying that trade in life-insurance policies was tantamount to trading in human life.
It was the first court decision on whether selling life policies to dealers is allowed under the law.