grandparent paying 30 yrs for 1000.00 life insurance policy

[TAMMY]

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New Mexico. My Mother recently had to put my grandparents in a retirement ranch leaving her with power of Attorney over their estate. My Grandmother had advised her on a life insurance policy she was paying for. Its for a 1000.00. After investigating it, we found out that she has been paying on it since 1952. The monthly payment now is 27.00 a month. The local insurance company notified my Mother for payment because they could no longer draft it from my Grandmothers account. When questioning it, the agent said he would check into it. Nothing has been resolved yet. But he comes to collect every month. My Mother has paid for 3 months now. My Grandparents are 92 and 89, they have been taken advantage of, what should we do now?

 

[Litigation!]

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New Mexico. My Mother recently had to put my grandparents in a retirement ranch leaving her with power of Attorney over their estate. My Grandmother had advised her on a life insurance policy she was paying for. Its for a 1000.00. After investigating it, we found out that she has been paying on it since 1952. The monthly payment now is 27.00 a month. The local insurance company notified my Mother for payment because they could no longer draft it from my Grandmothers account. When questioning it, the agent said he would check into it. Nothing has been resolved yet. But he comes to collect every month. My Mother has paid for 3 months now. My Grandparents are 92 and 89, they have been taken advantage of, what should we do now?

My response:

Do now about what? In 1952, $1,000.00 was worth as much as $10,000 is today. So, what do you want?

IAAL

 

[Litigation!]

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"My Mother recently had to put my grandparents in a retirement ranch . . ."

My response:

Why am I getting visions of two old geezers trying to bust some broncos in a white-fenced corale? Yeeeeeee Hawwwwwwwwww. Ride 'em cowboys!!

IAAL

 

[Shay-Pari'e]

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New Mexico. My Mother recently had to put my grandparents in a retirement ranch leaving her with power of Attorney over their estate. My Grandmother had advised her on a life insurance policy she was paying for. Its for a 1000.00. After investigating it, we found out that she has been paying on it since 1952. The monthly payment now is 27.00 a month. The local insurance company notified my Mother for payment because they could no longer draft it from my Grandmothers account. When questioning it, the agent said he would check into it. Nothing has been resolved yet. But he comes to collect every month. My Mother has paid for 3 months now. My Grandparents are 92 and 89, they have been taken advantage of, what should we do now?

How the heck do you see your grandparents being taken advantage of? If they want the policy, then the policy needs to be paid.

 

[Betty]

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New Mexico. My Mother recently had to put my grandparents in a retirement ranch leaving her with power of Attorney over their estate. My Grandmother had advised her on a life insurance policy she was paying for. Its for a 1000.00. After investigating it, we found out that she has been paying on it since 1952. The monthly payment now is 27.00 a month. The local insurance company notified my Mother for payment because they could no longer draft it from my Grandmothers account. When questioning it, the agent said he would check into it. Nothing has been resolved yet. But he comes to collect every month. My Mother has paid for 3 months now. My Grandparents are 92 and 89, they have been taken advantage of, what should we do now?

Some life insurance policies are payable for life (premiums are payable for life) & pay the full death benefit at death whenever that might be. That is apparently the type of policy your grandmother has. If your grandmother had passed away in 1953, the full $1000 should/would probably have been payable to the named beneficiary at that time (though there is usually a 2 yr. contestable period). However, since your grandmother is still living, she/someone still needs to continue paying the premiums when due. I wonder what type of policy it is & if it would have any cash value & the amount of CV if policy was cancelled or lapsed. She has been paying on it for many yrs. & if permanent type coverage there might be a cash value due if cancelled or lapsed. It is something you could ask the agent.
edited for the following: Actually most policies that are considered "premiums payable for life policies" become paid up at such an age as 100 if the insured happens to live that long.

 

[Dandy Don]

Please post the name of the insurance company here and the city/state they operate in. How much is the monthly premium and how much has she already paid in total premiums?

This is possibly unethical behavior on the part of the insurance company and I will check to see if they have been brought up on charges for this for possibly charging more in premiums than the payout value is worth. You will probably want to file a complaint about this with the New Mexico Insurance Commissioner (who has a website and other address/contact information) to have him investigate this on your behalf.

DANDY DON IN OKLAHOMA ([email protected])

 

[ALawyer]

I can not imagine why the premium should be $27 per month, which is $324 per year, on a life policy with a face amount of $1,000, unless the policy is for "annual renewable term" life insurance. The premiums on those products increase each year with age. The premiums on cash value products ten to remain constant, regardless of age. The effect is that younger people essentially heavily "over-pay" on cash value insurance protection when they are young (as a gneral rule, the younger one is, the lower the risk of death is). But after deducting the heavy sales commissions, premium taxes, underwriting costs, administrative costs and other overhead, the excess above the pure "mortality premium" is invested by the insurance company. That sum, plus earnings, then hold down premiums in later years when the risk of death is far higher, although the premium is the same as that in the early years.

Policies sold door to door, where premiums were collected door to door, are called industrial or home service life insurance. Traditionally these products were "cash value" prodicts NOT term insurance.

MetLife and some of the other large companies that used to sell "industrial" insurance policies declared all their home service or "debit" policies "paid up" in the 1970s, and no premiums have been due for something like 30 years. Also, they continued to accumulate dividends on such policies, with the result that an industrial policy from MetLife with a face value of $1,000 probably pays several thousand dollars on the insured's death, not just the $1,000.

Something seems very wrong here.

 

[Betty]

Yep - $27.00 a month would be a lot to pay for a $1000 policy taken out in 1952 when your grandmother was much younger - unless it is annual renewal term with the prem. increasing each yr. I sure would like to know the type of policy it is.