Mom to Mom

[LilacTree]

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@henderson wrote:

Have you checked into term insurance?  I'd fine a good insurance agent to discuss this with.

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@henderson

Yes.  Because of my age and health, I am only qualified for $15,000.

But it is a good idea to talk to an agent and I think I'll do that.

[Mominohio]

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@LilacTree wrote:

@2blonde@Mominohio

That's the rip.  There is no money in my account.  That's why I now have to "replenish" it every year.  There's nothing to "cash in."  Unless I die, it's worth nothing.

Thank you for your advice.  I have to weigh this every year.  Hopefully not for long.

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Again, I'm no expert, but this is not a whole life policy if you have no cash value or surrender value after paying in all these years (unless you have borrowed against it in the past).

If you would care to share the amount someone might be able to give better advice. If it is a very large policy, it might be worth keeping, but know you could live another 20 years and you really need to do the math to see if you will actually be loosing money at some point.

[Mominohio]

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@LilacTree wrote:

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@Carmie wrote:

My DH had one of these tern insurance policies that went up when he was 50.  Term policies are not lifetime policies, they are usually good for about 10-20 years, then they have to be renewed with new terms.

Because my children were not little any more, the insurance was not needed, so we cancelled it.

life insurance is not needed when you have adult children. It is needed if the children are young as a way to take care of them.  There is no reason to leave adults money,  As long as your final expenses can be paid, you will be okay without it.

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@Carmie

That's not exactly true anymore.  Who knows what's going to be "gone" by then?  Social Security?  Medicare?  Any kind of health insurance at all?  What will doctors and hospitals be charging in 2027?  What will meds cost?  And most definitely Medicaid will be gone.

They all went to college, graduated with honors, have good paying jobs . . . NOW.  Who knows what will be available to them in ten years?  I certainly don't.

Sorry for the rant, certainly not meant for anyone's post.  I just think of these things and it worries me what kind of world they will have, and my grandchildren.

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@LilacTree

You are so right about all the uncertainty of the future, but factor into that the uncertainty that even this company may not pay off on the policy should times get bad or the company go belly up. 

I know a mother always worries, but honestly, depending on your financial situation (and I'm guessing you aren't rolling in money if you want the kids to help pay for the premiums for this), you really shouldn't be preparing for your adult children's future, but worrying about your needs from now to the end, and making sure you have prepaid/set aside money for grave site, final services etc. Either consider a cheap term policy (one of those $15,000 ones can be more than enough depending on where you live and what you want done in the end) or simply set aside the money for it/pre pay what you can now.

Only if this is some really large policy, like hundreds of thousands, might the kids be interested in paying now to reap more later. At any rate, it seems like you should get some advice from an insurance agent or lawyer about this policy and what is really going on. 

I'm having to deal with some policies my mom bought about 20 years ago, that are now paid up to the face value, but if she doesn't keep paying, it will lapse. She has already paid more in premiums that will be paid out. There is a fraction of the death benefit available in a cash out situation, and we are considering just taking that money now and cutting the losses here and now. She really got ripped off on these, but she did it without consulting us kids or an agent and just bought these things off of the TV. She would have been better off to save that premium amount each month in a savings account  (or in her mattress!) and would have had more money in the end than she will have with these policies. Thankfully they are relatively small, but still it is a multiple thousands of dollar loss she will suffer. 

Please seek a professional to decide where to go from here, as if you are anything like my mom, you aren't destitute, but really can't afford to waste your money at this point in your life. Keep us posted about what you learn as you get this figured out.

[LilacTree]

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@Mominohio wrote:

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@LilacTree wrote:

@2blonde@Mominohio

That's the rip.  There is no money in my account.  That's why I now have to "replenish" it every year.  There's nothing to "cash in."  Unless I die, it's worth nothing.

Thank you for your advice.  I have to weigh this every year.  Hopefully not for long.

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Again, I'm no expert, but this is not a whole life policy if you have no cash value or surrender value after paying in all these years (unless you have borrowed against it in the past).

If you would care to share the amount someone might be able to give better advice. If it is a very large policy, it might be worth keeping, but know you could live another 20 years and you really need to do the math to see if you will actually be loosing money at some point.

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@Mominohio

I'm amazed that you think I could live another 20 years when I am approaching 80 next January and am certainly not healthy. LOL

I bought a whole life policy in 1993 at the age of 55.  At the end of the 90s, they changed the policy to this market-based investment tool that I never even heard of which means my money was being invested (by them) and not accumulating in my account.  Instead they were "investing" with my money in the market, obviously without profit (probably on purpose).  I was naive and never even knew it was going on.  They never sent me one single thing to indicate my money was being used. 

I never noticed that the date on my policy was changed to 1996 and my age was changed to 58.

This was something insurance companies were doing around the end of the '90s.  There was a class action litigation, but I was not aware of the litigation, let alone that my policy was one of those being changed.  I found out from one of the attorneys I spoke to when I received my first "lapse" notice, after having a serious altercation with the insurance company who insisted I approved this change.

They lost the class action litigation and that practice was stopped, but those who didn't know about it ("clueless," like me) were stuck with this policy.  

I wish I had tried to borrow against the policy, which I never did.  Had I done so, I would have found out far sooner what was going on because there would have been nothing to borrow from.  I was just going along, paying my premium and always felt secure I had the policy I originally bought and that my beneficiaries would have received the payout upon my death.  Was I stupid?  A resounding YES to that!!  I should have paid closer attention.

The insurance company changed its name in 1996, so I did have to sign some paperwork at the name change . . . that's when they must have also changed the policy and its date, and its type.

I think it was a huge scam with probably thousands of policy holders left holding the bag . . . but the insurance company continued to stay in business.  Because that's how it is.  A slap on the wrist.

I'm going to try to research that litigation tomorrow . . . too tired now and going to go to bed.  If I can recall the details enough and find the litigation, I will post the link here.

[LilacTree]

@Mominohio

I did this calculation when I received the first lapse notice.  The value of the policy is $200,000, $50,000 for each of them.  The original monthly premium payment was already high ($160 per month).  It has tripled since then, and since turning 75, I have had to pay this extra money every year to "replenish" the account value.  I will have to pay at least $500 per month if I want to try to avoid this shortfall again next year.

And you're right.  The way things are going, they may not ever have to follow through with paying out on policies anyway, since they already control this country.

As far as my funeral expenses, whatever it costs to cremate me will be the only expense.  The family may want to get together for some kind of gathering, but that would most likely be at someone's house.  They already know I want nothing more.

[GenXmuse]

Does this policy go to cover funeral costs at all? 

[KarenQVC]

It sounds like 2 months of payments will pay for direct cremation.  I would drop the policy.

[KarenQVC]

Also, it is possible you will use Medicaid before your death.  Check to see if Medicaid will get $ out of your life insurance payout to pay themselves back.  In any event, don't stress over leaving $ for your kids.  Not necessary.

[software]

I'm an only child, my parents' life insurance was enough for their final expenses, nothing more.    I was in my 50s when they passed.  I didn't need money.   

Kids are not entitled to an inheritance.    If the parents are comfortable in every way and there are assets to be passed to the next generation, that's great.   But it's not necessary to build assets only for the purpose of giving it to your kids.   Your kids need to make their own assets.

Just wondering if your parents left you $50k when they passed.   Trying to figure out why you are trying to bankrupt yourself over this.

The insurance company probably pulled a fast one on you and others.   It might be worth doing some research.

Hope this works out for you, whatever you decide

@LilacTree

[Carmie]

$50k for each of your children would be nice, but that is not really a lot of money,  if the future goes belly-up.

Many of the people that I know that inherited money spent it or most of it in short order.  Your girls could buy a car with their inheritance and poof, it would be gone.

Even though you lost money with this bad insurance, you are still alive to enjoy your family.  You can't put a price on that.