by GarySpicuzza » Sun Oct 05, 2008 10:55 am
So I'm clicking through the 857 channels last night and I stumble upon Suze Orman.
The caller says she and her husband always kept their money separate and just split the bills. Caller says husband died and had a $250,000 life insurance policy naming her as beneficiary but to her surprise he had racked up about $100,000 in debt in HIS name only. Caller said she knew there was "some" debt but had no idea it was that much.
Caller asks Suze if she should pay off that debt or should she keep the life insurance money for her future financial needs?
Simple question and the simple answer should have been keep the life insurance benefit for yourself.
But Suze wanted to know the amounts of the outstanding loans and their respective interest rates, they were between 7% to 16%.
Then Suze asks her where she could get 7% interest guaranteed and told her to pay off the $100,000 worth of SOMEBODY ELSES DEBT!
That's bad advice.
If the debt is just in your husband or wife's name ALONE that's not your bill to pay. If the creditors were concerned about the repayment of their loan upon death they would have required a collateral assignment on his life insurance policy BEFORE extending credit.
They didn't, the debtor died, they're out the money, too bad. They didn't understand the importance of the beneficiary collateral assignment information in time. Make better business decisions next time.
It's not the morally "right thing" to do to pay off that debt with your life insurance proceeds. That money is for the exclusive benefit of the person named as the beneficiary in the life insurance policy. (Florida)
Don't think for one moment the "risk" of the debtor dying isn't built into the interest rate charged on unsecured debt.
It is.
Suze's advice was geared towards not hissing off bankers and credit card companies. The caller would be a fool to unload $100,000 in the absence of a legally enforceable obligation.
Natural person named beneficiaries should keep their money.
The caller is a very smart woman for NOT comingling her money and his money and his debt with her debt.
As Tina Turner would say:
What's Love Got To Do With It?
The caller says she and her husband always kept their money separate and just split the bills. Caller says husband died and had a $250,000 life insurance policy naming her as beneficiary but to her surprise he had racked up about $100,000 in debt in HIS name only. Caller said she knew there was "some" debt but had no idea it was that much.
Caller asks Suze if she should pay off that debt or should she keep the life insurance money for her future financial needs?
Simple question and the simple answer should have been keep the life insurance benefit for yourself.
But Suze wanted to know the amounts of the outstanding loans and their respective interest rates, they were between 7% to 16%.
Then Suze asks her where she could get 7% interest guaranteed and told her to pay off the $100,000 worth of SOMEBODY ELSES DEBT!
That's bad advice.
If the debt is just in your husband or wife's name ALONE that's not your bill to pay. If the creditors were concerned about the repayment of their loan upon death they would have required a collateral assignment on his life insurance policy BEFORE extending credit.
They didn't, the debtor died, they're out the money, too bad. They didn't understand the importance of the beneficiary collateral assignment information in time. Make better business decisions next time.
It's not the morally "right thing" to do to pay off that debt with your life insurance proceeds. That money is for the exclusive benefit of the person named as the beneficiary in the life insurance policy. (Florida)
Don't think for one moment the "risk" of the debtor dying isn't built into the interest rate charged on unsecured debt.
It is.
Suze's advice was geared towards not hissing off bankers and credit card companies. The caller would be a fool to unload $100,000 in the absence of a legally enforceable obligation.
Natural person named beneficiaries should keep their money.
The caller is a very smart woman for NOT comingling her money and his money and his debt with her debt.
As Tina Turner would say:
What's Love Got To Do With It?
Posted: Sat Feb 28, 2009 08:57 pm Post Subject:
Gary, I agree with you. Not hate mail, lol
I think it is a choice and that should be clear. Someone can choose whether they want to pay it or not. In Sandra's case, I think she should tell them to suck off and that they do not have permission to contact her via telephone anymore and that if they continue to harass her that she will file suit against them. Tell them to put their request in writing and then when it arrives, kindly reply to them that this account does not belong to you, you have no authorizations nor obligations to the account and that they are not to correspond with you any further and cc the FTC on it.
They harass people unrelentlessly because they are commissioned on the cases they collect on.
Posted: Sun Mar 01, 2009 06:17 am Post Subject:
Yesterday only I came across a diplomatic advisor of a local nenowned insurance co. As per his advice, there is a clause in the company's portfolio that the insurance benefiated to a nominee is not deductible by loans repayment, legally. The logic behind this is that the purpose of insurance is to recover the loss occured by the death of a working person. But there is a twist that you can not nominate a person (rather will be assigned) who is not dependant on you.
Posted: Fri Mar 06, 2009 01:53 pm Post Subject:
Our Gubment will bailout Citibank,.... but go try and get a loan from a bank because you lost your job and NEED the money....it will never happen.
gary i agree with you in this aspect. the whole purpose of the system is If they make a mistake it can be overruled but any individual does that then it is insane in their eyes
Surely if any individual refuses to pay he has to face lawsuits but it is never the case when corporates fail to pay their dues to share holders becoz they are responsible for only 'face value.'
It's trick of the system. one must decide where they want to fit in.........
Posted: Sun Mar 08, 2009 06:33 pm Post Subject: debt
to original topic
life insurance was bought to replace the deceased income and not the debts.Unless the loan was collateral,she has no obligation tp pay off the debt.She shoudl just refuse to pay off $100,000 and keep the insurance money.Since she is the beneficiary,noone has any right to take that money.
Many people said,morally she should pay and thats is what they have done but here we are talking legally and moreover how many times,people beleive that they do things morally through out their lifes.Moreover,this $100,000 debt,if she pays,goes to companies profit and loss account and they are in business to make profits and are making profits in billion$$$$$....so ya either way she should not pay....
deceased intention was to have his wife smooth life and thats why he bought life insurance....
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