Whole Life - Additional Insurance Negated

[anteater]

Yes, well, when I was referring to the "end of the world," I was thinking of of the fiduciary standard in the Investment Company Act. The big brokerages have fought off imposition of that standard several times. And the life insurance companies would also.

The problem is... When we talk of "fiduciary standard of care" in a general way, most of us have an idea of what that means... roughly. But when the rubber meets the road in particular situation, it is not always as clear what it means. And that is why I spoke of "leading us off into the thickets" when discussing your situation.

The question is... Did the company have an obligation to the policy owner - under whatever standard of care - to lay out all the options for taking funds out of the policy?

 

[pinto375]

Allow me to add something. Hypothetically, if the agent said to a policy holder, "you have XYZ amount available and you should take what you need, and it will also be non-taxable" , does that raise the bar for the existence of a fiduciary standard of care? Does that sound like tax advice?

 

[pinto375]

The question is... Did the company have an obligation to the policy owner - under whatever standard of care - to lay out all the options for taking funds out of the policy?

NAIFA (National Association of Insurance and Financial Advisors)

Code of Ethics

Preamble

Those engaged in offering insurance and other related financial services occupy the unique position of liaison between the purchasers and the suppliers of insurance and closely related financial products.

Inherent in this role is the combination of professional duty to the client and to the company as well. Ethical balance is required to avoid any conflict between these two obligations.

Therefore, I Believe It To Be My Responsibility:

To hold my profession in high esteem and strive to enhance its prestige.

To fulfill the needs of my clients to the best of my ability.

To maintain my clients' confidences.

To render exemplary service to my clients and their beneficiaries.

To adhere to professional standards of conduct in helping my clients to protect insurable obligations and attain their financial security objectives.

To present accurately and honestly all facts essential to my clients' decisions.

To perfect my skills and increase my knowledge through continuing education.

To conduct my business in such a way that my example might help raise the professional standards of those in my profession.

To keep informed with respect to applicable laws and regulations and to observe them in the practice of my profession.

To cooperate with others whose services are constructively related to meeting the needs of my clients.

=http://www.naifa.org/about/ethics.cfm]NAIFA Code of Ethics | NAIFA

 

[ecmst12]

Given that there's $15k at stake here, don't you think it's worth talking to a lawyer about? If there is a strong case to get the insurance company to pay this money out, you won't have a hard time finding one to take the case on contingency.

 

[Betty]

Agree, talk to an attorney as has been suggested several times. That's your best bet.

 

[pinto375]

I will post back with the outcome. I appreciate the help offered here.

 

[Betty]

You're welcome. Please do post back with the outcome.