State Farm Complaints

Posted: Thu Apr 15, 2010 08:25 pm Post Subject: IS STATE FARM PURGING ELDERLY LIFE INSURANCE OWNERS DELIBERA

WOULD SOMEONE PLEASE HELP ME WITH THIS PROBLEM! STATE FARM just cost me $5,000!! (PLEASE!)

(I KNOW THIS IS LONG, BUT WOULD YOU PLEASE READ ALL OF IT & PASS IT AROUND? I NEED HELP WITH THIS!)

How the State Farm Insurance Screwed Me Today with a Massive $5000 Tax Bill

State Farm seems to be just another corporation where its workers check their souls at the company door, if they even have them to start with. I went to a tax preparer this morning and was told because State Farm cancelled my life insurance policy I would owe $5,000 in taxes, instead of getting a $550 refund.

Last January 2009, I paid for my yearly insurance premium of $130.70 for a life insurance policy my Dad talked me into getting soon after I got out of the US Army. I made the payment on time, but State Farm 'lost' it. They didn't notify me of the lost check and a couple of months later they cancelled the policy I've had for almost 40 years.

Through the years, when times were rough, I made loans against the policy, which was permitted by the company. Once I borrowed money from my policy to help my brother who's wife just had a baby. They didn't have medical insurance so I paid for the $4,000 medical expenses so they wouldn't be in debt. State Farm often encouraged borrowing against the policy, saying it was a good way to get temporary help. It wasn't even necessary to repay the loan because it was just added to the total loan of the policy. If I died, the policy would still pay, but subtract the debt balance from the payment. Having a loan against the policy was not only permitted, but encouraged by State Farm. Hell, at this moment, I truly am worth more dead than alive. The 'insurance' is in effect until April 17th, so if I died before then the insurance company would have to pay. But that is probably why State Farm cancelled my policy without telling me. It seems obvious they are purging people who are getting older to lessen their financial risk. And they don't give a damn about the great harm they cause to the people they are targeting.

My policy also had a paid-up feature where it automatically paid your premium if you choose not to pay. It's just added to the loan. But last year, even though I made a payment to them to keep my policy current, they canceled my policy. Then they sent me a complicated statement saying I received a payment of over $23,000 for 2009, when I didn't take a dime out of the policy during 2009. The last time I took a loan against the policy was years ago. Then I later learned that the $23,000 would be added as taxable income to all my other taxable income for 2009.

Had State Farm not deceived me by not being honest, I would have received a $550 tax refund for 2009, but because State Farm 'said' I didn't make my payment last January 2009, my tax bill is now almost $5,000.

After feeling completely violated, I left the tax preparer's office and went to the nearest State Farm agent. I explained the situation and was then put on the phone with a 'higher up' in the organization. He told me if a mistake was made State Farm would issue a new 1099 form to the IRS saying I did not receive any money from them, because I didn't. But he said to prove a 'mistake' was made I had to show him a cancelled check. He assumed no responsibility if his company lost the payment. Nor would he accept any responsibility to explain why his company failed to notify a loyal 40 year State Farm customer the ramifications of not making a payment. At no time did State Farm ever mention the tax liability which would result from a missed payment, regardless of the origination of the fault. Of course, corporations are infallible. They never make mistakes. And if they do, they never admit to them.

I talked to a person who said his name was Daniel. I said I wanted to write a letter directly to him and asked for his address. He willingly gave me the address, but when I asked him for his last name he gave me a company code instead. I remember when people used to be proud of who they were. They didn't hide behind masks or fake names. People used to act with honor and had empathy & compassion for other people. They didn't check in their integrity, honor and common human decency at the door where they worked. But unfortunately, that world doesn't exist in corporations any more. People are apparently ashamed of revealing who they are. I suppose they are afraid of an angry person who felt violated in some way. But if corporate leaders acted with honor and treated people with respect and empathy they wouldn't have to hide behind fictitious names.

I've worked many years for corporations, but I wouldn't dream of hiding behind a disguise. But I didn't have to. I always treated people fairly, with respect and I always great valued them. But in today's corporate world people are not even looked at as human beings. People are nothing but a revenue sources to be exploited as much as possible until they can be discarded. That's what State Farm did to me today. It doesn't matter to a corporate worker if their actions greatly harm other people. Sometimes I wonder if some of them take great satisfaction in knowing they hurt others.

I told the State Farm representative "Daniel" that a corporation can do whatever it wants to do. They make their own rules and they can always amend their rules. But in my case, they chose to do nothing. They didn't care that a missing $130.70 check, misplaced by them, led to a massive $5,000 tax debt causing great financial harm to a fellow human being and a loyal customer. They didn't care that I would be in debt to the IRS for years while trying to pay it off.

On my drive back home I heard on the radio about how tea baggers were out today demonstrating against the government. They are filled with anger, rage, fear and loathing for the government, but seem to cheer on corporations like State Farm's abuse of human beings. They attack the government for asking them 10 inane questions on the US Census, but say nothing while corporations invade their lives daily, acquiring and accumulating every personal piece of information they can. And you can be sure that corporations will use that information to exploit you or profit off your information by selling it and reselling it. But instead of attacking the real evil in this country, tea baggers glorify unbridled capitalism and savagely attack the government, even if the government is trying to help them.

And if they are purging people who are getting older isn't that a federal crime? Any lawyers out there!!!!!!


IF THERE IS ANYONE WITH ANY IDEAS TO HELP IN THIS SITUATION, PLEASE HELP!!!!!

Posted: Wed Jun 30, 2010 01:51 am Post Subject:

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Posted: Tue Aug 31, 2010 03:53 pm Post Subject: statefarm termlife taxes..elderly

same thing is happening to us..

Posted: Wed Sep 01, 2010 02:37 am Post Subject:

I'm sorry I did not see LSR's post before now. There is a huge problem here.

Although a lost payment is one thing, if there was not enough money in the cash value to pay the $130.70, then the policy would lapse for non-payment of premium. Given the history of policy loans and interest that would accrue, this could indeed be possible.

What LSR does not state is what he did after receiving the notice of policy lapse. He does not state that he attempted to reinstate the policy by proving insurability and paying the past due premium -- something he can still do today, since State Farm allows three years to reinstate.

Because LSR made no attempt to reinstate, State Farm is required by law to report as INCOME all proceeds paid from the policy in excess of cost basis, which apparently was about $23,000. That amount seems rather excessive, in view of a $130 annual premium. If the policy has been held for 40 years, only $5200 or so would have been paid into the policy. 40 years ago, there was no Universal Life insurance, so this policy is undoubtedly straight whole life. So I'm a bit amazed that there was enough cash value to create $28,000 of indebtedness.

The reported income does not require LSR to have taken any money out in 2009, it simply was the year in which the policy lapsed and the distribution had to be reported. Reinstating the policy before December 31, 2009 would have prevented LSRs dilemma.

LSR claims that State Farm misplaced the check -- I don't know how he could even begin to prove that, unless it was later cashed. It could just as easily have been lost by the USPS or delivered to the wrong address, in which case what can State Farm do about that?

But LSR had to have received a lapse notice, and one last opportunity during the grace period to pay the premium due. Unless the USPS lost that, too. Anything is possible. But didn't LSR ever check his checking account to make sure the check had cleared? If it hadn't, he should have contacted State Farm to find out what the problem was.

Perhaps LSRs single biggest error was not allowing State Farm to automatically draft his checking account for the annual premium. It would have prevented the entire scene he posts. It costs nothing. It might be said it would have been worth $5000.

If LSR truly believes State Farm did something dishonest, then he should complain to his state's Dept of Insurance and let them inquire with State Farm as to what happened. If he's really insistent that an insurer is guilty of bad faith, or cancelling elderly people to avoid death claims, there are hundreds of lawyers who would take his case, try to make it a class action, and stand ready to collect a huge paycheck for their effort if they win.

I'm not sticking up for State Farm -- I am not one of their agents. There are probably some faults on both sides, but I think LSR bears the most liability here -- for not doing the right things. There are many things he could have done, but does not mention even trying, to avoid his losses. Did "Daniel" or the agent he talked to not mention reinstatement as a possibility? Or was LSR simply so mad at State Farm that he chose to go away mad, and accept his $5000 income tax liability?

Hillbilly . . . if you have specific details, please post them. "Same thing is happening to us" is insufficient to offer any advice.

Posted: Thu Oct 21, 2010 06:07 pm Post Subject: canceled auto insurance

i canceled my car and two trucks insurance with state farm after 38 days i had paid a total premium of $801.60 they gave me a refund of $414.11 cent they charged me $387.49 fort the 38 days i think this was a total ripoff stay away from state farm if you know what is good for you.

Posted: Thu Oct 21, 2010 06:11 pm Post Subject: vehicle insurance

the premium was for six monts