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Life insurance policy surrender question
Old 09-19-2018, 01:38 PM   #1
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Life insurance policy surrender question

Not sure if this is the correct forum, but here goes...


I am looking for some help from someone that was in the life insurance industry for what I will need to do whenever the time comes to submit a policy on my mom.


I have a policy from Insurance Company of America, which seems to be Prudential out of New Jersey. The policy is for $500... yes, that is the amount, but I do not want to ignore it if I can get the money...


My question is on reading the surrender clause. It states that it will pay the $500 upon surrender of the policy, proof of death AND proof of premium payments. Now, how the heck am I supposed to prove payment of premium? The policy had 20 years of premium payments and then it was fully paid, no more premium due. So, that means the last payment was in 1955, before I was born.


Can they hold me to that requirement of proof of payment?
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Old 09-19-2018, 02:02 PM   #2
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When my mother died a few years ago, my sister found a similar small policy that we didn't know about, but were the beneficiaries of (although it was dated from before we were born). She called an agent of the company and I think once she sent a death certificate and our addresses, they sent us each a check. It all happened pretty smoothly IIRC.
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Old 09-19-2018, 03:21 PM   #3
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Quote:
Originally Posted by Texas Proud View Post
Not sure if this is the correct forum, but here goes...


I am looking for some help from someone that was in the life insurance industry for what I will need to do whenever the time comes to submit a policy on my mom.


I have a policy from Insurance Company of America, which seems to be Prudential out of New Jersey. The policy is for $500... yes, that is the amount, but I do not want to ignore it if I can get the money...


My question is on reading the surrender clause. It states that it will pay the $500 upon surrender of the policy, proof of death AND proof of premium payments. Now, how the heck am I supposed to prove payment of premium? The policy had 20 years of premium payments and then it was fully paid, no more premium due. So, that means the last payment was in 1955, before I was born.


Can they hold me to that requirement of proof of payment?
Whether they can or not I dunno... that is a legal question... but I doubt that they will.... usually all that is required is a claim form and death certificate.... they will have record of the policy and premium payments.

You may want to call the company... if it was Prudential and it could well be... the major insurer was The Prudential Insurance Company of America .... it might be worth a lot more than $500.. back then Pru was a mutual company and it is likely a policy that received dividends. Also, if it was a participating policy your Mom may unknowingly also own some Prudential Financial stock from when they demutualized back in 2001.

If it is really old the CSV and face amount may not be all that different so it may be easier to surrender it.... the tax treatment will differ but if your Mom's income is so low that she doesn't pay taxes then that isn't an issue.
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Old 09-19-2018, 03:24 PM   #4
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My question is on reading the surrender clause. It states that it will pay the $500 upon surrender of the policy, proof of death AND proof of premium payments. Now, how the heck am I supposed to prove payment of premium? The policy had 20 years of premium payments and then it was fully paid, no more premium due. So, that means the last payment was in 1955, before I was born.
Were periodic (monthly? annual?) statements sent?
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Old 09-19-2018, 03:29 PM   #5
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Probably, but few people keep them that long.
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Old 09-19-2018, 03:55 PM   #6
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Were periodic (monthly? annual?) statements sent?

The premiums were $1.26 per month...
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Old 09-19-2018, 04:29 PM   #7
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What year was the policy issued? What is the insured's current age?
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Old 09-19-2018, 04:42 PM   #8
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What year was the policy issued? What is the insured's current age?

Issue in 1935 and age of 99...
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Old 09-19-2018, 08:24 PM   #9
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Wow!
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Old 09-19-2018, 09:33 PM   #10
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Wow!

Yea... but then I also have two burial plots her dad bought in 1919... small town in NJ and not worth much...


BTW, calculated and the $500 policy would be a $9200 one today...
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Old 09-19-2018, 10:00 PM   #11
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What I did was cash in my Dad's life insurance policies while he is still alive. At 86 years old, the difference between the cash value and the payout at death was less than 5%. Now that Dad has the cash, it's in a bank account in both our names. When he passes away, there won't be any need to contact an insurance company or worry about long lost relatives trying to lay claim to any of his estate.

His 2nd wife passed and no one could collect on her policy because it was payable to 'the estate of'. There was no 'estate'. There was just my dad and 2 sons of her's from her previous marriage. We offered up birth cert, marriage cert, etc. to the insurance company but they insisted that 'the estate of' required a probate, lawyers, etc. The amount was $500 and hardly worth it. Far as I'm concerned, insurance companies pulling stunts like that; depriving families of their loved ones insurance policy is criminal.

So cash in life insurance policies before they die. At least get in writing what the cash value is today and compare that to the death benefit and be sure that an actual person is named as the beneficiary, not something arbitrary like 'the estate of'.
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Old 09-20-2018, 08:32 AM   #12
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Not sure if this has a cash value... I only have a copy of the first page... will have to go to safe deposit box to get the real doc...


BTW, I did cash out a policy that was $10,000 face and my mom had already paid in MORE than $10,000 in premiums!!! Probably close to $15,000 total premiums paid and I got like $9700 cash... that was the stated amount in the policy... what a rip off...


At least this one was fully paid after 20 years... $300 total premiums and $500 face...
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Old 09-20-2018, 03:03 PM   #13
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$500...What you have is an "industrial policy". They are no longer sold. It may be worth more than $500. Call Prudential @ their 800 # and ask as many questions as you can. They are glad to get rid of these policies as they cost them a lot of dough just to maintain. No proof of premium payment will be required.
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Old 09-20-2018, 03:18 PM   #14
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Originally Posted by Texas Proud View Post
..... BTW, I did cash out a policy that was $10,000 face and my mom had already paid in MORE than $10,000 in premiums!!! Probably close to $15,000 total premiums paid and I got like $9700 cash... that was the stated amount in the policy... what a rip off.....
You must have some facts wrong... unless the policy was less than 10 years old that is impossible... a regulator would never approve such a policy design as it would violate laws that disctate minimum nonforfeiture amounts (but it gets real complicated real quickly).
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Old 09-20-2018, 05:37 PM   #15
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You must have some facts wrong... unless the policy was less than 10 years old that is impossible... a regulator would never approve such a policy design as it would violate laws that disctate minimum nonforfeiture amounts (but it gets real complicated real quickly).

It was written in the 1950s... $10K face and like $250 to $270 per year premium... $250 X 60 years is $15K... and yes, that was the premium as I got a bill in the mail before I cashed it in... (IIRC it was $265, so probably $16K)...


I cashed it out and got less than the $10K...



So, no wrong facts...
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Old 09-20-2018, 05:38 PM   #16
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$500...What you have is an "industrial policy". They are no longer sold. It may be worth more than $500. Call Prudential @ their 800 # and ask as many questions as you can. They are glad to get rid of these policies as they cost them a lot of dough just to maintain. No proof of premium payment will be required.

Thanks for the info, and from everybody else...


I will give them a call and see what happens..
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Old 09-20-2018, 10:54 PM   #17
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It was written in the 1950s... $10K face and like $250 to $270 per year premium... $250 X 60 years is $15K... and yes, that was the premium as I got a bill in the mail before I cashed it in... (IIRC it was $265, so probably $16K)...


I cashed it out and got less than the $10K...



So, no wrong facts...
Here is why I was skeptical... I bought a policy in 1977 with premiums of $21/month... ~$250/year...have owned 41 years and paid in $10,300 in premiums....CSV is over $32k and growing every year.... 3.5% last policy year.

It makes no sense that a policy that old would have a CSV less than premiums paid.
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Old 09-21-2018, 09:06 AM   #18
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Here is why I was skeptical... I bought a policy in 1977 with premiums of $21/month... ~$250/year...have owned 41 years and paid in $10,300 in premiums....CSV is over $32k and growing every year.... 3.5% last policy year.

It makes no sense that a policy that old would have a CSV less than premiums paid.

I agree... I was shocked that I got less than the premiums... was told to look at the contract and, yes, they paid the amount that was listed in the contract...



I was more disappointed that my mom kept paying the premiums for the past 38 years after my dad died... I had thought that it was a paid up policy like this $500 one...
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Old 09-21-2018, 10:13 AM   #19
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Just out of curiosity, who was the issuing company?
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Old 09-21-2018, 12:51 PM   #20
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Just out of curiosity, who was the issuing company?

Universal Guaranty Life insurance
5250 South Sixth Street, PO Box 5147
Springfield, IL 62705


Cashed out Jul 2015
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