The insured is wanting a life insurance company to issue a policy WITHOUT submitting any evidence of insurability.
You mean to say that these plans don't require medical underwriting or such to issue the policy, only the promise to pay the premium from the policy holder is sufficient to receive the coverage ??
Can you imagine what the premium would be for an 18 year old male for auto insurance if they could get a policy without having to submit their driving record, tickets, DUIs, reckless driving citations, suspensions etc.
Simply GUARANTEE ISSUE the policy!
The premium may be $1,000 per month or more.
The same concept applies here and hence the cost per thousand for the life insurance is through the roof.
These policies truly aren't worth the paper they are printed on BUT no agent advisor was involved in the transaction and BECAUSE of that fact:
The insurance company can legally rob you by having you screw yourself. _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
My question was meant to ask if it is legal for an Insurance Company to continue to charge the $62 each and every month. This was not a policy bought through TV. I remember when the agent used to come by each month to pick up the check. Shouldn't they have converted the policy or are they (or the agent) just pocketing the monthly premium? I beleive this was a policy sold to her elderly grandmother and continued out of a promise made to her grandmother before her death. I think it's a company called American National Insurance. Can they keep ripping her off?
My question was meant to ask if it is legal for an Insurance Company to continue to charge the $62 each and every month.
YES.
An insurance company charging premium to provide life insurance is perfectly legal.
Life insurance policies terminate in ONLY one of two ways:
#1) the insured person dies;
#2) the contract owner cancels the policy.
Why don't you have a discussion with your wife and grandpa and figure out at this point whether or not it would be better to surrender that policy for its cash value or continue making the premium payments?
Nobody on an Internet message board can help you. And $62 per month for a $3,000 policy isn't enough information without seeing the contract itself or without knowing the current cash surrender value of the policy.
Your comments below are non-sense rhetoric:
Quote:
My question was meant to ask if it is legal for an Insurance Company to continue to charge the $62 each and every month.
Quote:
Shouldn't they have converted the policy or are they (or the agent) just pocketing the monthly premium?
Quote:
I beleive this was a policy sold to her elderly grandmother and continued out of a promise made to her grandmother before her death.
Meaning.... your wife continued a perhaps useless, under performing policy, on grandpa's life to keep a "promise" to her grandma?
What's the promise? Please pay more in premium than perhaps the policy's death benefit so when grandpa dies she get's back less than what she paid in premium? That's the same method by which average American's play the stock market and then when they lose they go ALL-IN and try to make it up on volume!!!
Quote:
Can they keep ripping her off?
See statement above and below:
Life insurance policies terminate in ONLY one of two ways:
#1) the insured person dies;
#2) the contract owner cancels the policy. _________________ Register Now to have your Insurance queries solved.
Just to set the record straight the "guest" post was me.
I had a corrupt cookie monster gremlin that I had to dispose of preventing me from logging on or off. _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
I am puzzled to learn that there is such life insurance policy where the policyholder has to pay $62 a month or $744 a year for a $3000 benefit.
I wonder if there are other policy benefits that were not mentioned.
To my knowledge, term insurance annual premium is normally below 1% of the sum assured of the policy, whole life annual premium is around 2-3% of the sum assured and endowment annual premium varies from 4-6%.
$744 a year is a whopping 24.8% of $3000. Could there be some typo error where the $3000 is actually $30000? _________________ I am an insuranc sales coach for almost 2 decades. I have a collection of insurance agents' sales stories. To know more, you can visit http://www.stories-connect.com or http://xoseph.wordpress.com
I am puzzled to learn that there is such life insurance policy where the policyholder has to pay $62 a month or $744 a year for a $3000 benefit.
These are GUARANTEED ISSUED policies.
No underwriting, no medical questions, no attending physician statements, no medical records, no para-med exam, no blood, no urine, no height, no weight, no nothing... EXCEPT your signature and your check.
You can have AIDS, cancer, heart attack, stroke, diabetes, be 5 foot tall and 500 lbs, have cognitive impairments, DUIs, drug addict, crack addict, run a meth lab, be a street walking worker, AND THEY WILL STILL ISSUE THE POLICY BECAUSE THEY DON'T ASK ANY QUESTIONS!
These are very small face amount contracts with HUGE premiums relative to the cost per thousand.
I'll say it again:
The insurance company can legally rob you by having you screw yourself.
I'm not quite sure which is worse???
These contracts that EVERYBODY qualifies for OR the insurance company that advertizes a male age 40 could get $250,000 of life insurance coverage for less than $15 dollars per month that NOBODY qualifies for?
Could being the operative word.
Well at least they underwrite then offer you a contract at double the advertized rate. _________________ Gary Spicuzza, *SAFE
Copyright 1956.
No rights reserved.
*Self Appointed Financial Expert
Even if such insurance is not illegal, there is moral issue here.
Insurance should be a cost-effective way for people to transfer their risks and insurers manage the risks by assessing the risks and decide appropriate amount of premium.
In the absence of cost-effective element and risk assessment, these guaranteed issued policies appear more than a gambling tool.
The insured has to die early so that there is a financial gain. Otherwise, he becomes a loser if the total premium paid is more than the policy benefit.
I understand that such products are meant for people who are uninsurable.
If that is the case, there should be some remark on product brochures, application forms or contracts to notify the customers the intention of such insurance. Just like the rating guide for movie goers. There are movies rated PG and there are movies rated 18SX etc. _________________ I am an insuranc sales coach for almost 2 decades. I have a collection of insurance agents' sales stories. To know more, you can visit http://www.stories-connect.com or http://xoseph.wordpress.com
I'll bet the mud smells nice _________________ Please feel free to go to my website at www.markcolbert.com or, if you have a specific question, you can email me directly. I hope I can answer any questions you might have. If not, I can certainly find an answer right away.
That's the same method by which average American's play the stock market and then when they lose they go ALL-IN and try to make it up on volume!!! 
