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False loan claim and interest against policy

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Dandy Don

Senior Member
Do you know whose life was being insured with this policy?

Do you remember purchasing this policy or not?

You may want to ask them to send you a copy of the policy just so you can read the terms and provisions.

Please look at your credit report to see if this item ever appeared on it or not.

After you have received a copy of the policy, you can tell Prudential that you wish to cash the policy in and receive the payout of the $1,733.99 which you may want to use to begin paying off some this debt and then you pay the remaining $2,153.04 out of your pocket.

If I were you I would be having a consultation with a business law attorney in your local area who specializes in credit and collections, debt, etc. Or you can review your state's business law online. There is probably a loophole or technicality that stipulates that after so many years have passed that they can not continue to try to collect this debt.

I doubt that they will even go after you in court about this because they have no actual documentation/proof that you took out the loan. If it does go to court all you can do is to tell your side of the story and the court will probably believe you.

The problem is whoever discovered this item realized the significant amount of interest that had accumulated and they are simply being greedy. You also have the option, if you want to pay this debt, to settle by negotiating for a lower amount, suggesting that if they will settle this with you for $1,500.00 they may want the money so much that they will agree just to get the matter over with.


Senior Member
I have not heard back from anyone."
You wrote that the policy was issued in 1953. I'm guessing that you were a child back then and the policy was purchased by one of your parents. That parent would have owned the policy even if it was on your life and perhaps that parent took out the loan 24 years later. Just speculating.

At any rate, I doubt if you are going to want to pay a lawyer to handle this given the amount involved.

Just understand that the outstanding loan will continue to erode the case value and the death benefit until the policy isn't worth having anymore.


Senior Member
As a note, this is an older thread, originally posted by Patti.insurance in August (although the poster did return to the forum a month ago). It is possible the matter has already been handled in Michigan by Prudential.

Dandy Don

Senior Member
The reason she reposted it was because it has not yet been handled.

She does not necessarily need to hire the services of an attorney regarding this matter, just purchase an hour of consultation time to determine if she has options to get this resolved expeditiously.

But the suggestion that it may have been a policy belonging to her parents was an excellent insight--if in fact the policy was taken out by one of them, then the daughter is not responsible for the loan taken out by one of the parents.

She needs to be asking Prudential who was insured and who the beneficiary was if (hypothetically) the death occurred.


I'm a Northern Girl
On some whole life policies, if premiums are not received they are deducted from the cash value of the policy, and this does indeed show as a loan against the policy. So I am interested in whether the OP has been paying her premiums.

BTW, I have been paying for one insurance policy in this way for years.


Senior Member
I am interested in whether the OP has been paying her premiums.
In post #12 OP mentioned that it was a 20 year whole life policy taken out in 1953. It would have been fully paid for by 1973 with no further premiums required.

Many policies on children are done that way (facilitated by extremely low rates) so that the child can have a paid up policy upon reaching adulthood.

if in fact the policy was taken out by one of them, then the daughter is not responsible for the loan taken out by one of the parents.
Not directly, no, but indirectly the policy benefits continue to erode while the loan balance gets larger, so...

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