A lawsuit has been filed against an Iowa company over an alleged scheme that involves investors betting on an elderly woman’s life expectancy by taking out a life insurance policy on her.
The lawsuit involves the late Evelyn Zeman of Michigan and a Cedar Rapids company called ULI Funding. According to Zeman’s estate, a group of individuals who had no ties to Zeman took out a life insurance policy on her in 2006 when she was 79 years old.
The lawsuit claims Zeman had no need for the policy and bore no financial risk as these strangers paid the premiums on the policy, expecting to collect a profit either by receiving the policy’s proceeds when she died or by selling the policy to yet another group of investors who also were strangers to Zeman.
Court records indicate the practice of wagering on the life expectancy of strangers through insurance policies dates back to the 16th century. In their modern form, stranger-originated life insurance, or STOLI, policies serve the interests of institutional investors who hope to profit on people’s death through high-value policies that serve no legitimate insurance need.
Such polices, the lawsuit claims, “distort the proper use of life insurance” and turn such policies “into a cash machine whereby a stranger to the insured is actually more interested in seeing the insured dead than alive.”
Court records indicate STOLI polices are illegal, and under the state law of Delaware, where many insurance companies are incorporated, a decedent’s estate can recover from the investors any proceeds that were paid out through a STOLI policy.
In the newly filed Iowa lawsuit, the Zeman estate says it is seeking “to recover the proceeds of the illegal human-life wager placed on Ms. Zeman’s life. Because the strangers who orchestrated this policy had no insurable interest in Ms. Zeman’s life, the policy was an illegal wager that violates Delaware’s constitution, Delaware’s statutory prohibition against STOLI policies, and centuries of public policy.”
The lawsuit alleges ULI Funding of Cedar Rapids is the owner of the policy and collected its proceeds from the insurance company Transamerica Occidental Life Insurance Company.
Lawsuit: STOLI schemes launched in 2004
According to the lawsuit, in 2004, a family of interrelated entities known generally as “Coventry” initiated a scheme that “successfully generated many STOLI policies.” Coventry allegedly worked with a nationwide network of insurance producers who identified senior citizens meeting certain investment criteria and then helped influence those seniors to become involved by agreeing to be covered by STOLI policies.
The lawsuit claims those “hand-selected senior citizens” were persuaded to participate by individuals who used “rosy terms that camouflaged the transaction’s impropriety as being a ‘risk-free’ opportunity, ‘just a good deal,’ or as being similar to ‘hitting the lottery’ or acquiring a winning ‘bingo’ card.”
The lawsuit alleges that “numerous courts have held, as a matter of law, that policies originated under this Coventry program constitute STOLI schemes” in which the beneficiaries lack the required insurable interest.
In January 2006, Coventry allegedly procured a $1.1 million life insurance policy on Zeman through Transamerica. “The policy was structured as a wager on Ms. Zeman’s life,” the lawsuit claims, with Wilmington Trust serving as the designated beneficiary until the policy was acquired by ULI Funding, which collected the proceeds once Zeman died in September 2023.
Zeman’s estate is now suing ULI Funding to recover the proceeds of the policy.
Bank says it only served as ULI Funding’s ‘intermediary’
ULI Funding, which is a limited liability corporation whose officers are not publicly disclosed, has yet to file a response to the lawsuit. State records show the company was formed in 2021 by Gregory E. Miller-Breetz of Transamerica.
In a separate, ongoing federal lawsuit, Zeman’s estate is also suing the Bank of Utah over its alleged role in the scheme.
In that case, the bank admitted to the court in December 2025 that it paid to Transamerica the premiums on Zeman’s life insurance policy, then submitted a claim for the policy’s death benefit when Zeman died, and then collected the death benefit from Transamerica — “all in its capacity as securities intermediary for ULI.”
In its defense, the bank has argued that “Ms. Zeman willingly and knowingly participated in a scheme to cause (Transamerica) to issue a life insurance policy without an insurable interest” so that she could then “sell the policy to investors in exchange for consideration.”
That case is scheduled for trial in March 2027.
