Question

What are other ethical concerns that Stilton may be facing?

Answer 1

Complete Question:

James Stilton is the chief executive officer (CEO) of RightLiving, Inc., a company that buys life insurance policies at a discount from terminally ill persons and sells the policies to investors. RightLiving pays the terminally ill patients a percentage of the future death benefit (usually 65%) and then sells the policies to investors for 85% of the value of the future benefit. The patients receive the cash to use for medical and other expenses, and the investors are "guaranteed" a positive return on their investment. The difference between the purchase and sale prices is RightLiving's profit.

Stilton is aware that some sick patients may obtain insurance policies through fraud (by not revealing their illness on the insurance application). An insurance company that discovers such fraud will cancel the policy and refuse to pay. Stilton believes that most of the policies he has purchased are legitimate, but he knows that some are probably not.

Requirement:

What are other ethical concerns that Stilton may be facing?

Answer with Explanation:

The ethical concerns of Stilton are as under:

• Should he tell the investors about the fraud about the policies before making sales?
• What policies must be implemented so that the legitimate people can easily sell the policies and if not implemented it would not be fair for the RightLiving, Inc.
• Stilton will also be facing ethical concerns because the business wishes that the customer dies early so that they can benefit from increased deaths of policy holders.