I just cancelled my mom's life insurance policy. it had a face value of 4,500 which bought when she was 64. She has been paying 72.00 quartly. she is 90 now. they told me that she will get less than the face value. is this even legal? she paid over 6,000 dollars into this policy.
My mother is 92 this year, She has a Life Insurance with a Death Benefit of $15,000 which expires on her reaching 92. The insurance company is requesting an increase of three times her premuim for the same coverage but only up to her 95th birthday. Is this a right thing for them to do and, what guarantee do I have that the premium will not continually increase. What if she lives beyond 95. Are there any thoughts on this ....I do not know what to do. Are there any Insurance companies out there who are offering coverage for adults over 90 years old?
A client of mine, at age 80 was duped into buying a life insurance policy wherein the internal rate of return was horrible. Her local bank told her to lump sum into a life insurance policy $25,000 in turn the life insurance company gave her a policy with a death benefit of $32,000. The benefit to my client's children is $7,000. Let's do the math on this...... $25,000 put into a bond with a yield of 6% (yes these do exist even today 9/5/2008) would have earned her $7,500 after 5 years (granted you have to pay tax on these earnings whereas there is no income tax due on an inheritance). My point in bringing this up is to state that I believe that the insurance policy was sold to her by her bank representative to merely make a commission.
Why can't Congress & Senate pass a law that eliminates Caveat Emptor for senior citizens? Why can't Congress & Senate pass a law that requires bankers to act with fiduciary duty for their clients?
Regarding my example above, I do not want to suggest that all life insurance policies that are sold to seniors are bad. There are in fact some that are good. I have utilized life insurance with a senior to create a lot of wealth for their children (granted I am a fee-only planner and can't accept any insurance commissions) -- the example I cited above is a great example of a banker taking advantage of somebody when the banker is motivated by a commission.
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10 Steps to Protect Seniors from Insurance Scams
Thank you for what ever input you might have!
Camille, NY
A client of mine, at age 80 was duped into buying a life insurance policy wherein the internal rate of return was horrible. Her local bank told her to lump sum into a life insurance policy $25,000 in turn the life insurance company gave her a policy with a death benefit of $32,000. The benefit to my client's children is $7,000. Let's do the math on this...... $25,000 put into a bond with a yield of 6% (yes these do exist even today 9/5/2008) would have earned her $7,500 after 5 years (granted you have to pay tax on these earnings whereas there is no income tax due on an inheritance). My point in bringing this up is to state that I believe that the insurance policy was sold to her by her bank representative to merely make a commission.
Why can't Congress & Senate pass a law that eliminates Caveat Emptor for senior citizens? Why can't Congress & Senate pass a law that requires bankers to act with fiduciary duty for their clients?
Regarding my example above, I do not want to suggest that all life insurance policies that are sold to seniors are bad. There are in fact some that are good. I have utilized life insurance with a senior to create a lot of wealth for their children (granted I am a fee-only planner and can't accept any insurance commissions) -- the example I cited above is a great example of a banker taking advantage of somebody when the banker is motivated by a commission.