Verl W. and Frances M. Haderlie - Page 9

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          continued the Royal policy by payment of the premium for each               
          successive year.                                                            
               Petitioners also discuss the fact that they were financially           
          unable to afford the $40,653 annual premium and that they had to            
          wait until Schwab's rebate check was credited to petitioner's               
          bank account before their equal-in-amount premium check to Royal            
          could be honored.  In that regard, petitioners argue that their             
          maximum insurance coverage needs were no more than a few hundred            
          thousand, if they could afford it.  It is irrelevant that the               
          insurance transaction entered into by petitioner was beyond his             
          needs or means.  Our focus must be on the benefit or enrichment             
          petitioners received.  Although the transaction with Royal,                 
          through Schwab, may have been "too good to be true," petitioners            
          were willing to engage in the transaction because they received a           
          benefit.  They did not become involved with Schwab out of                   
          disinterested generosity.  Instead, they willingly applied for a            
          $1,250,000 policy with Royal knowing that they would receive the            
          benefit of that coverage for a year without any cost.  In order             
          to obtain that benefit, petitioner signed various documents, took           
          a physical, and made representations that he was applying for and           
          accepting $1,250,000 of coverage.  In exchange for that                     
          performance, petitioner received $40,653 from Schwab and/or the             
          benefit of $40,653 of insurance without payment.  Either way,               
          petitioners were enriched.                                                  

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