Ins Co Claims Policy Surrendered

[plinstrot]

What is the name of your state? Illinois

My mother-in-law has the original life insurance policy in her possession of her recently deceased husband which was taken out in 1943 ($2,500). The insurance company (AIG) is claiming that the policy was surrendered in 1966. When asking them for proof of this surrender, they wrote back and said that they only have to keep records for 10 years after the policy was surrendered. The letter was NOT signed. A loan was taken out against the policy in 1963 totaling $1,215. She even has copy of a letter from the ins co in 1963 in which they sent my in-laws a Policy Loan Agreement to "withdraw the cash value,$1,296""you will retain this valuable insurance protection." The ins co also included a Policy Release "that should be signed, witnessed, dated, and returned to us along with the policy if you definitely decide to terminate this insurance." My mother-in-law, in addition to having the original policy, still has this Policy Release, never signed, and never returned. I believe they are trying to cheat my 77-year-old mother-in-law from collecting on her husand's policy. She is listed as the beneficiary. Any advice you could render would be greatly appreciated.

 

[CALIF-LAWPRO28]

What is the name of your state? Illinois

My mother-in-law has the original life insurance policy in her possession of her recently deceased husband which was taken out in 1943 ($2,500). The insurance company (AIG) is claiming that the policy was surrendered in 1966. When asking them for proof of this surrender, they wrote back and said that they only have to keep records for 10 years after the policy was surrendered. The letter was NOT signed. A loan was taken out against the policy in 1963 totaling $1,215. She even has copy of a letter from the ins co in 1963 in which they sent my in-laws a Policy Loan Agreement to "withdraw the cash value,$1,296""you will retain this valuable insurance protection." The ins co also included a Policy Release "that should be signed, witnessed, dated, and returned to us along with the policy if you definitely decide to terminate this insurance." My mother-in-law, in addition to having the original policy, still has this Policy Release, never signed, and never returned. I believe they are trying to cheat my 77-year-old mother-in-law from collecting on her husand's policy. She is listed as the beneficiary. Any advice you could render would be greatly appreciated.

My response:

Sue AIG for Breach of Contract, Fraud, and Specific Performance.

IAAL

 

[Betty]

Was the policy loan taken out for the cash value in 1963 paid back in full?

 

[CALIF-LAWPRO28]

Was the policy loan taken out for the cash value in 1963 paid back in full?

My response:

Betty, you need to read. The loan was never completed or consummated. The only way an insurance company would have sent a check would be if the Release was signed and mailed back. According to our writer, it wasn't.

IAAL

 

[Betty]

My response:

Betty, you need to read. The loan was never completed or consummated. The only way an insurance company would have sent a check would be if the Release was signed and mailed back. According to our writer, it wasn't.

IAAL

The Release was only to be signed & returned with the policy if they wanted to terminate (surrender) the policy & take the cash value instead of a policy loan - they did not have to sign the release if they wanted to take the policy loan, pay it off & continue the policy in force!!
The OP said a loan was taken out & they received a letter saying protection would remain in force - it would if loan taken & paid off -- OP said release ALSO sent if they wanted to terminate (surrender) policy. Betty P.S. The pol. loan agreement was needed for the pol. loan - not release - release was to terminate policy.

 

[Betty]

OP (plinstrot) What type of life ins. policy is this? Were premiums to be paid until death (or a certain age for example 99) & if so, were they --- or was it a policy that was to be paid up after so many years & then policy proceeds paid at death? (& was pol. loan paid off?) What does the policy's face (1st) page say as to type of policy? It had to be some type of permanent policy if it had a cash value as opposed to a term pol. which does not have a CV.

 

[plinstrot]

Betty,

Thank you for your assistance. On the bottom of the first page of the life ins policy, it states: Expectancy Endowment, Insurane Payble in 43 Years, Or At Prior Death, Premiums Payable for 20 Years, Non-Participating. Isn't it up to the ins. co. to prove that the policy was surrendered? When I wrote them and asked for proof of the surrender, they sent back a letter (with no name and no signature---just "Customer Service"), the letter stated..."This policy, as stated before, was surrendered in 1966. We do not have any further records on this policy. Insurance regulations require that we keep the records for a terminated/lapsed policy for ten years." I have just talked with my mother-in-law. She will search her check registers (yes, she has them back that far) to see how she paid the loan taken out against the policy. I will write back when I have that information (in a day or two). Thank you, again, for your help.

Paula

 

[Betty]

Endowment policies are payable at the death of the insured or at a specified maturity date if insured is alive. Premiums are sometimes paid from the date of issue to date of maturity or sometimes limited to fewer years than maturity date. In your mother-in-law's case (as per your post) it looks like it was to be paid up in 20 yrs & ins. payable in 43 years or prior death. Policy taken out in 1943 & should have been paid up in 1963 which would be around the date policy loan taken out of cash value. I hope your mother-in-law has something that she might have kept (a letter from co. would be great) indicating when policy loan paid off. They normally send a letter letting you know your loan is now paid off. Coverage couldn't have been paid out in 43 yrs. apparently since your mother-in-law or her husband would have known that & MIL has policy + ins. co. saying terminated in 1966. I doubt there is any way on your own that you can force ins. co. to pay out the benefits since their records say pol. terminated in 1966. I know the amt. of ins. is not large but if you want to pursue, you may need to contact an attorney to explain your problem & get their advice. Your MIL may have to go to court & sue them for money due & they will have to prove in court that policy surrendered. You might also want to put in a complaint on the ins. co. with the div. of ins./state ins. commissioner. In Illinois the Division of Ins. is at 320 Washington St., Springfield, Il. 62767-0001 (Michael McRaith) phone 1-866-445-5364. If the pol. was isssued in a state other than Il., you may have to contact that state's ins. dept./ins. commissioner. You can do a web search for this info. However, the div. of ins. cannot resolve a dispute when only evidence is your word against theirs (ins. co.) but you can report them. You might as well contact the Better Busi. Bureau & put in a complaint with them also. Life ins. cos. sometimes work hard to resolve complaints when they know they are being reported to the BBB (hurts sales). Many people check with the BBB before buying ins. Betty

 

[plinstrot]

Betty,

Thank you so much for your help. I will follow your advice.

Paula

 

[Betty]

You're welcome.