Worst life insurance EVER!!!

[LongPrime]

^I didn't write the law or even understand it other than several decades ago many paid for prepaid funerals and then the furneral closed . All records of course was destroyed. One nearby funeral home had a bunch of corpses in the basement and the funeral home industry wouldn't complete the final disposition of the body- Big stink about it and eventually the State had to pay. People got upset and a law/regulation became into being. Darn Government, it had to put regulation on how the body is taken care of because the industry couldn't do it.

[LongPrime]

@ERD50,
ITM, CC. I collected the premium but the price of stock collapsed before I could change my attitude to a sell. My losses was far inexcess of the premium collected and buy-to-close. SCTY.

[aja8888]

Simple phone call and a two page online (or paper) form to fill out to put a cremation in progress. Then charge to your CC and get the points, too. I did three like that, very simple. Prepaying for a future cremation is not necessary and adds cost.

[meierlde]

One question, can the policy convert to a paid up policy? That is take the cash value and buy a one premium whole life policy where the cash value is the premium.

[GrayHare]

Quote:

Originally Posted by LongPrime the funeral home industry wouldn't complete the final disposition of the body- Big stink about it

I should think so.

[LongPrime]

body =bodies.

[redduck]

Quote:

Originally Posted by Andre1969 My grandmother took out a life insurance policy for me when I was either an infant or a little kid...can't remember which. I forget the specifics on it, but it was enough to pay for my funeral in the event I died prematurely.

And, Andre1969 quoted re: his last purchase via Amazon:

Quote:

Originally Posted by Andre1969 Either condoms or my grandmother's eye drops, can't remember which...

Andre1969, your grandmother takes out a life insurance policy for you because she wants to make sure you have a proper burial if needed. And, 44 years later you show your appreciation by buying her a pack of condoms?

[Texas Proud]

Quote:

Originally Posted by Golden sunsets Texas Proud; Are you sure that your Mom has been paying those premiums all of these years? I have a whole life policy (sold to me by my Dad - yup) that has been paid up for many years. I get a bill every year stating what the increased CSV will be if I pay the annual premium and what the increased CSV will be if I elect to use the "accelerated payment method". Of course the increase in the CSV is less if I don't pay the premium. My Dad sold me this policy in 1971 in order to make sure that "final expenses" were covered. It was a very small policy. It was common back in the day for whole life policies to be sold in order to cover funeral costs. Pretty morbid, but that was the sale's pitch.

I cannot go back and see if she paid every year..... and even though her memory is failing on some things, she is still pretty sharp on others... this is one where she says she has paid that amount every year....

I tend to believe her on this.

[Texas Proud]

Quote:

Originally Posted by meierlde One question, can the policy convert to a paid up policy? That is take the cash value and buy a one premium whole life policy where the cash value is the premium.

We are getting some more info in the mail soon... not sure what else we can do.... but since the money is so small we will probably cash out...

[LongPrime]

You do know how "paid up" works? =
Dividends (refund of overpayment of premiums per IRS) + amount necessary from CV. Not included in paid-up premiums are the transaction fee for taking a loan from CV plus the prepaid 1st year's interest of the loan (installment calculated) from CV.

[meierlde]

Quote:

Originally Posted by LongPrime You do know how "paid up" works? = Dividends (refund of overpayment of premiums per IRS) + amount necessary from CV. Not included in paid-up premiums are the transaction fee for taking a loan from CV plus the prepaid 1st year's interest of the loan (installment calculated) from CV.

Speaking of reduced paid up conversion:
As I understand it from reading the policies, converting to paid up does not involve a loan, it just takes the CV and buys a single premium insurance policy with a value that the cv will pay for. For example one old policy I have is paid up at 85, but if I convert at 65 the policy is reduced from 10k to 8.8k face value, for a savings of $ 3600. (ignoring npv issues) The policy usually provides a table that says that if you convert to a paid up policy you get x amount of insurance. Or of course if the policy has an option you could use the face value to buy term. So there is no loan involved or interest. It keeps some of the insurance, and eliminates any future payments. It appears that the cash value will continue to grow somewhat even if you do this.

[LongPrime]

^ correct.
Forgot about that method.

[FinanceDude]

Almost sounds like one of those old "vanishing premium" whole life policies sold by Jackson National. DW's dad bought one in the late 70's. He paid a bunch of money into it and then they told him he didn't have to pay anymore. Then 3 years later he got a premium notice. Apparently their "projections" were "off" and they reserved the right to start charging premiums again and so they did. We ended up cashing out the policy and putting it into a CD............

[Telly]

The worst life insurance that I have personally seen was the stuff my Mom paid for when I was in elementary school. It was a colored sheet of paper every kid was supposed to take home and show to parents shortly after the start of each school year. There was an ability to collect an amount due to severe and permanent injuries...

The highest amount was for "Skull fracture with resultant brain damage - $50"

When I started my professional life many years ago, I was surprised how many new graduates were buying whole life in their first year out of school. They had no dependents, nothing. When I asked them why, they all said their parents thought it was important that they do it, that "the rates would never be lower". And their parents had a friendly insurance man that would help them get it started.
I assume he was the one that suggested it to the parents and convinced them... Salesmanship!

Most professional jobs had some "free" life insurance as a benefit, with a higher amount available via payroll deduction. I took the free, and further along supplemented it with Term via a professional association. The cost was lower, and since it was not tied to a job, it was always in force. I cancelled it when I turned 55, the need was gone.

[athena53]

Quote:

Originally Posted by Telly The worst life insurance that I have personally seen was the stuff my Mom paid for when I was in elementary school. It was a colored sheet of paper every kid was supposed to take home and show to parents shortly after the start of each school year. There was an ability to collect an amount due to severe and permanent injuries... The highest amount was for "Skull fracture with resultant brain damage - $50"

Ah, good old AD&D (Accidental Death and Dismemberment). Loved the gory schedule (Loss of one eye, $X, Loss of finger, $Y....)

Quote:

Most professional jobs had some "free" life insurance as a benefit, with a higher amount available via payroll deduction. I took the free, and further along supplemented it with Term via a professional association. The cost was lower, and since it was not tied to a job, it was always in force. I cancelled it when I turned 55, the need was gone.

I should have cancelled mine; I realized last time I did my taxes that I had imputed income of $2400 on employer-paid insurance over $50K that I didn't need, and when I asked about cancelling it they said I had to wait till the next enrollment period. I quit 2 weeks ago so it's no longer a concern.

[brewer12345]

Quote:

Originally Posted by athena53 Ah, good old AD&D (Accidental Death and Dismemberment). Loved the gory schedule (Loss of one eye, $X, Loss of finger, $Y....)

I once dealt professionally with a company that sold lots of AD&D by mail. I asked the exec in charge of that business how they did with underwriting, since they basically bought lists of people and mailed the junk mail ("you are automatically approved!"). He said they did great due to conservative assumptions about the risks they took as long as they avoided "nubvilles." Naturally I asked him with a Nubville was. Apparently in some less economically favored localities, Bubba would get a little to far behind on the trailer lot rent or the buy here-pay here truck loan, dig around for a solution, and realize that they had an AD&D policy that paid $500 for a toe, $1000 for a finger, etc. Said Bubba would then go into the woods and have a "hunting accident" or would have a mishap with a lawnmower.

[Texas Proud]

Update...

Well, not really... just wanted to add something else...

Was over at mom's looking for a copy of the policy... did not find one... BUT, I did see where she wrote down that she has a $500 policy... with no backup...


So, a trip to the safe deposit box is in my future....

[LongPrime]

Comment: TP, You may find this worthwhile, maybe not.

The neighbor whom I bought a second hospital bed (two months ago) said the among the boxes of her mother's (95) personal effects, they found a life insurance policy. They took policy to our state's Insurance Commission, who said that there is a data base of life insurance policies. I think neighbor said they so far found 4 additional policies.

Who knows? There may still be a chance that your Mom's current policy is only bad. There could be a policy that's even worse.

[FinanceDude]

Quote:

Originally Posted by brewer12345 I once dealt professionally with a company that sold lots of AD&D by mail. I asked the exec in charge of that business how they did with underwriting, since they basically bought lists of people and mailed the junk mail ("you are automatically approved!"). He said they did great due to conservative assumptions about the risks they took as long as they avoided "nubvilles." Naturally I asked him with a Nubville was. Apparently in some less economically favored localities, Bubba would get a little to far behind on the trailer lot rent or the buy here-pay here truck loan, dig around for a solution, and realize that they had an AD&D policy that paid $500 for a toe, $1000 for a finger, etc. Said Bubba would then go into the woods and have a "hunting accident" or would have a mishap with a lawnmower.

When I worked at AAA for a college night telemarketing job a million years ago, we sold an AD&D policy that was added to the membership..........for $5 a year you got $1000 coverage. Some nights we would sell 50 of those with 3 reps...........

[jIMOh]

Quote:

Originally Posted by Texas Proud Do you know where this rule is located so I can talk to them... We are planning on cashing out... and I would like to get am much as I can...

I just heard back from an insurance agent, and she confirmed what I posted was in fact law- the insurance company has to pay out a percentage higher than the cash value for this to be considered insurance.

Check state statutes or ask your insurance agent to see how to determine more facts.