reverse life insurance?

[lastsamurai]

Has anybody heard of this?

I met a friend of mine on friday who is trying to sell me life insurance and he told me this option. It kinda sounds like a scam but I was wondering IF anybody has heard of this or if this is a loophole. This is the way he explained it to me.

1. Find a candidate who is about 60-65 years old.
2. An agent will write a 2-3 million dollar term policy on the subject and will put the bank as the beneficary.
3. The bank will 1099 you 150K where you have to 1099 the agent roughly 50K.

This seems logical but is this ethical? any insurance experts in the house?