Death Bets Like Apollo’s Put Novel Issues Before Delaware Court

Delaware’s Supreme Court entered uncharted legal terrain Wednesday as it confronted the multi-billion dollar “death bet” business in a case challenging a life insurance payout to a third-party investor.

A wave of recent lawsuits, including a separate case against Apollo Global Inc., is raising novel legal questions about the controversial “stranger-originated life insurance” industry. The suits by family members seek to claw back death benefits from downstream investors like Apollo that bought the policies on the secondary market years after they were taken out by unscrupulous middlemen who paid senior citizens up front to sign them over.

Although reselling ...