Can anyone familiar with how whole life policies work answer a couple of questions for me?
My FIL passed away recently and when going through his financial records we found two whole life policies (on him and my MIL, who is still living). From what we can see, he took loans against them (or the "loan" was generated when he skipped some premium payments) and the loan amount now seems to be higher than the cash value. Is this possible? I thought the policy would just cancel if you got to that point. The policies were taken out around 1970, if that makes any difference.
There is a contact agent on the statement who I'm sure will answer my questions, but I don't want to call him without knowing some of the answers, since I've never dealt with whole life policies.
Second question - in discussing this among family members, my BIL (age 30) mentioned that he has a whole life policy as well, and possibly plans to borrow against it later for his son's (age 3) college, or some such. I was shocked, as DH and I looked into whole life a few years ago and the only people with good things to say about it were the salespeople. I would never buy it. Is it as bad an investment as I thought, or might this work out well for him?
My FIL passed away recently and when going through his financial records we found two whole life policies (on him and my MIL, who is still living). From what we can see, he took loans against them (or the "loan" was generated when he skipped some premium payments) and the loan amount now seems to be higher than the cash value. Is this possible? I thought the policy would just cancel if you got to that point. The policies were taken out around 1970, if that makes any difference.
There is a contact agent on the statement who I'm sure will answer my questions, but I don't want to call him without knowing some of the answers, since I've never dealt with whole life policies.
Second question - in discussing this among family members, my BIL (age 30) mentioned that he has a whole life policy as well, and possibly plans to borrow against it later for his son's (age 3) college, or some such. I was shocked, as DH and I looked into whole life a few years ago and the only people with good things to say about it were the salespeople. I would never buy it. Is it as bad an investment as I thought, or might this work out well for him?