by Guest » Wed May 20, 2009 05:15 am
hi i am in omaha nebraska, and my parents bought a 100,000 life ins. policy from 1983 and has used some of it for loans. they have paid it all back and has never took out a loan for more than a 1000 from the policy each time. anyway they had been making payments on time until they noticed something very wrong with their policy prem. it has almost doubled the payment, and they said that the policy is going to elaspe or so if they don't make the needed adjustment on their payment. so they did, and then we look over the history of the policy and noticed there was a loan out for over 14,000. and my parents don't know anything about it, so they contacted the ins. co. and ask to see the copy of that loan and who signed it. the ins. co. failed to produce the paperwork or anything that has to do w/ that loan. their excuse was " it's in the system. so repay it or the policy will be elaspe" so now my father is dying and my mother turns to me to find a solution to get this taken care of, and i'm leaning toward to sueing this ins. co. for fraud activity or what ever legal term they have for this sort. any advice is very much appreciated, thanks
Posted: Wed May 20, 2009 11:10 am Post Subject:
How many times did they actually have taken loans against the policy? And, were those loans fully paid-off? Please, let us know this information we would then check out more for you.
Posted: Wed May 20, 2009 11:39 am Post Subject:
What they are telling you (i assume) is the loan was taken out on line...they still have all the information, tell them to send it to you re: when, where, who etc..took out the loan...there HAS to be a way for them to track and verify this...If your daddy is dying you need to find a way to make these payments so it will not 'lapse'..or cancel for non-payment...even if you have to take out another loan.
Posted: Thu May 21, 2009 03:11 am Post Subject:
I think I understand what has happened, although I have no idea how it happened. Let me 'splain Lucy...
The loans from a life insurance policy are based on the amount of cash value in the policy. The amount of the loan(s) and the accumulated interest can never exceed the cash value amount, as the cash value serves as collateral for the loan. If the amount of the loan plus interest ever gets to the point of equaling or exceeding the amount of the cash value, the policy will go into default status. The policyowner has a period of time to "cure" the default, usually 30-60 days to prevent the policy from lapsing. If a policy lapses in this situation, it could also result (not likely) in a taxable event for the policyowner. Separate conversation.
So, it sound as if the insurer is requiring you to cure the default in order to keep the policy in force, and they're doing this by increasing the premiums. Part of this new payment amount will go to paying back the loan, and part will be for the life insurance.
The "$14,000" question is exactly the question. You need to find out how this additional $14k loan has appeared, and also why your parents "all of a sudden saw this in their statement and it was such a surprise."
Touchy subject, but I'm assuming mom and dad are "all there," so to speak? I realize it's highly unlikely they wouldn't remember the transaction or series of transactions that lead to this indebtedness, but understand- I have seen this happen many times.
Finally, the insurance company should absolutely produce the loan documents. You need to get on this NOW. No pussy-footing around, you need to get mean and lean on this, especially with an impending death at hand. The old "it's in the system" BS is ridiculous. If it was done electronically- they have a record. They are required to by law. Insurers are required to maintain records on their insureds for 3 years after expiration of the policy in your state. The policyowner has rights under the Fair Credit Reporting Act.
Don't wait. Don't hire an attorney just yet. Just be determined, and if you have to, threaten litigation, go to the press (they just love human interest stories about the big, bad insurer screwing the elderly) and complain to the state insurance division. Be relentless and unforgiving.
Those who know me in this forum might be a little surprised at my attack mode, as it were. I have personally seen this, and the family couldn't get it resolved prior to the death of the insured. It took them 4 years and too damn many attorneys to get their rightful death benefit. And it was all because the insurance company somehow transposed policy numbers on the loan docs, and the "loan" against the dead insured's policy was actually someone else's policy entirely. That sucked.
InsTeacher 8)
Posted: Thu May 21, 2009 10:04 am Post Subject:
Let me 'splain Lucy...
oh ricky you always do such a good job of splainin'Shouldn't she make sure though until this is cleared up that these premiums stay current?
Posted: Fri May 22, 2009 06:27 am Post Subject:
Shouldn't she make sure though until this is cleared up that these premiums stay current?
Unfortunately, yes. I have a feeling that this is all messed-up paperwork.
InsTeacher 8)
Posted: Thu Jun 04, 2009 11:10 pm Post Subject: LAPSED INSURANCE
You are doing the right thing by obtaining legal representation. Let your attorney take care of it for you. Try and get an attorney for seniors; they seem to know the ins and outs that seniors have to deal with. The company could be looking at their age or may be the agent could be a swindler. Just leave it to the lawyer.
Posted: Fri Jun 05, 2009 05:06 am Post Subject:
You are doing the right thing by obtaining legal representation. Let your attorney take care of it for you.
It's too bad we haven't heard back from the OP, I was hoping we could help her out. Maybe we did already and it's taken care of.
Anyway, I can't agree with the need for an attorney at this juncture. I have seen this happen on more than one occasion, and 99% of the time it's a paperwork screw-up and nothing to do with malfeasance or a conniving agent or carrier. I have a feeling that it's a bad paperwork trail and the OP needs to get on that trail to find out where and how that $14k loan came from that caused the contract to go into default. That's the key to this whole thing, and you don't need a lawyer to sort it out at who knows how many billable attorney hours. This could, in lawyer fees, cost easily a few thousand bucks.
No, the OP should be a pit bull on steroids and start pushing hard for the information. She's absolutely entitled to it and there is no legal cause for the insurer to deny her this information. Period. No lawyer, not yet.
If and when the time comes to hire legal counsel, it's when you have run into that brick wall that's absolutely impenetrable after you've exhausted every resource you have. That's when you hire the legal eagle, and be prepared to pay for everything from phone calls to letters to emails to photocopies + all them billable hours. This won't be a contingency case, so it's gonna cost the insured up-front.
InsTeacher 8)
Posted: Fri Jun 05, 2009 06:21 am Post Subject:
Hi todayinsurance,
Try and get an attorney for seniors;
Getting an attorney for the seniors would cost even more. Isn't there any other way of going for it? What do you think?
Steven
Posted: Fri Jun 05, 2009 06:42 pm Post Subject:
I think it would be a good idea to read through the entire thread before you post a question or comment that has already been addressed.
Getting an attorney for the seniors would cost even more. Isn't there any other way of going for it? What do you think?
Did you read the post just before you posted that comment?
InsTeacher 8)
Posted: Sun Jul 05, 2009 09:26 pm Post Subject: OMAHA
Get yourself an attorney that deals with the elderly. I know they have dealt with situations like this before. These lawyers know their stuff.
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