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My father sadly passed away. Much to our shock when we called his life insurance company to cash in on the policy, we found out the policy was surrendered during a period of time when my father was quite ill with dementia, so there is no way he could have cashed this out. We are going to audit the records, but is this kind of fraud common or likely?

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Many thanks for your feedback and it sounds quite dreadful-- what your husband did-- so sorry to hear that! We found out today that the life insurance was, in fact, cashed in. My mother did not connect the dots on when this happened. Our family accountant look into the records and confirmed today. This really highlights the need to really be aware and to document financial matters carefully. Thankfully my mom did benefit from the policy. This did get me thinking even more about how vulnerable older folks are when they are at the hand of unscrupulous caretakers. Patients get passed through so many hands and while most caretakers are well intentioned, it is easy to imagine that patients are manipulated into doing things that they don't understand. Certainly all of this has given me food for thought!
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The insurance company will have copies of everything, including either the cancelled check or a copy of both sides of the check. You can check the signatures. You could also track down the notary to see if that person is legitimate. (In my working days I have seen fraudulent notary stamps,etc). It's probably all legit, but then again, maybe not. Sounds like a pretty easy scam to pull off. Someone could have had your dad with dementia sign some papers for the insurance company and had a dishonest or phony notary "witness" it. Then they collect the cash value of the life insurance policy. Sorry to hear of your fathers passing and then this shock. Let us know how this turns out.
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Well, my husband cashed in his life insurance to buy a shiny convertible. Never told me for years. Said he didn't need it, he had life insurance at work. Then he switched jobs and the new employer couldn't get him insured due to health history. So he has nothing.
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The closest person to him was my mom and I am certain she didn't do anything since she did not even have the information about the life insurance policy. I happened to find it in papers my dad gave to me. Also, he did not surrender the policy for his care as he had no presence of mind to do so. It's just so confusing and disturbing. His wallet was lost during one of his stays in the many hospital visits he had. I was informed by the insurer that papers would have had to be signed along w/ a notary after which the check is mailed. We just have to get a old of the records and track the check.
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Not very common and usually someone close to the victim, with access to personal papers. If he was in a nursing home, is it possible he surrendered the policy to them to pay for his care?
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