Drama in Real Life

Posted: Fri Jun 27, 2008 04:46 am Post Subject:

Hey Gary,

Thanks for your help. I'll look into it.

Mark

Posted: Fri Jun 27, 2008 02:32 pm Post Subject: Clarification

The policy in question belongs to my grandfather. I am the one seeking help for him.

First, my grandparents are very uneducated, illiterate, and unbelievably naive! However, they are some of the most honest, hard-working, and willing to lend a hand to ANYONE, type of people you could meet.

I was extremely offended by what you said Gary Spicuzza about my grandfather being illiterate yet you were shocked he had the ability to "run debt up to his eyeballs", and file bankruptcy to "DISCHARGE all of his ill gotten illiterate gains, but toughed out making his cash value life insurance premiums since […] the $$CASH$$ in cash value life insurance is EXEMPT from creditor claims".

This shows how ignorant you really are! If you are old and illiterate, what type of jobs do you think one can get??? My grandfather worked 7 days a week, usually 10hours or more per day, slaving in a hot kitchen, making minimum wage minus taxes, just to earn nearly $15,000 per year!! It is expensive just to live and pays bills, forget luxuries, and shopping!! The reason my grandparents really had to file bankruptcy is because my grandmother had cancer and underwent several major operations in order to save her life, is this what you call “ill gotten illiterate gains”, saving my grandmother's life??? My grandparents raised me and growing up we never had the luxury of health insurance, we simply could not afford it.

When you go to the hospital for several emergency surgeries, they don't care if you are poor or illiterate! They still charge the exact same ridiculous amount for medical expenses. My grandmother's hospital bills from this time period resulted in more than my grandfather salary for nearly a decade!! They already lived paycheck to paycheck and then this unexpected astronomical expense was billed to them. I worked for 6 years making large payments every month in order to pay off these medical bills and bankruptcy settlement. They were not “discharged” at all!!! I also paid the premiums every month on the life insurance so it would not lapse!

I think ignorant assumption like the ones you made should undermine what little credibility I doubt you had to begin with!!!! Plus, what did your ill-mannered assumption have to do with this blog or the insurance questions being asked?? Nothing! But thanks for misleading everyone 

I am a college graduate with a business degree. I do not quite understand the annual statement with premium, cost of insurance, interest credits, account value and cash surrender value, and that is why I am seeking help. How can I or anyone else expect them to??? They are such simple people. They mistakenly put a lot of trust into their insurance agent. To them, if someone tells them something, it is as good as gold, they are such trusting people. This insurance agent told them this policy would last until 2031 just making the $ 166/mo premium payments and they believed that whole heatedly!

I called them yesterday to ask if they took money out of the policy and they were so misinformed they did not know they had this option for over 10 years. When I used the word “cash value” they had no idea what I was talking about. I asked my grandmother if she ever took money from the policy and she honestly told me she did not know they had a right to do that!

Posted: Fri Jun 27, 2008 02:41 pm Post Subject:

Because $166 per month in premium on a male age 60 STANDARD non-smoker is more than enough premium to run the policy for 30 years.

Posted: Sat Jun 28, 2008 12:44 am Post Subject:

Dear Granddaughter,

NOBODY would know those facts and circumstances UNTIL informed about them. This is the Internet where people post the most absurd, asinine, factually false and misleading half truths on Earth all under the guise of quasi-anonymity.

Now let's get back to the topic because on this thread, AS I STATED IN MY FIRST POST, I'm playing Devil's Advocate.

Did you review the two illustrations I posted above? I used the worst, most expensive STANDARD Male non-smoker rates and one company's policy stays if force for 29 years the other 35 years.

You wrote:

This insurance agent told them this policy would last until 2031 just making the $166/mo premium payments and they believed that whole heatedly!

Posted: Sat Jun 28, 2008 01:20 pm Post Subject:

Grandaughter, I'm sorry you were offended, and certainly understand why, (I may have been too, and like you was nearly raised by my grandparents and I am EXTREMELY protective of my 98 yr old grandmother...so I'm with ya' girl! :wink: ) ..however, I ''think'' Gary did not intend it personally, (meaning not your actual grandparents) but was playing devils advocate, meaning that he was making assumptions to try and reach a possible scenerio/conclusion of a fictious policy holder...I'm just sure personally insulting your beloved grandparents was not his intent (or better not be ! :wink: )....Hang in there, and hopefully we can get the information you need...sorry, I'm a P&C adjuster and cannot offer any assistance, but there are many here that specialize in your issue. Please provide all information you can so they can get the ''full'' picture...again so sorry you were offended... :(

Agents...Investigator, and Teachers....can we help here? What EXACTLY do you need to know (additional information) to help this poster....?????

Posted: Sun Jun 29, 2008 11:36 am Post Subject:

Exactly Lori.....

NOBODY even knows if Mark's original post was an actual case he's working on or just simply a made up story offered up for discussion.

The problem here, if we want to boil it all down, is the fact Grandpa has become UN-insurable and is STUCK with the last life insurance policy he bought.

No agent would leave a client with a failed insurer.
You would replace the old policy with a new company.
If you don't, some "other" agent will.

No cash value life insurance policy will perform when the MAXIMUM guaranteed cost of insurance rates are charged coupled with the absolute MINIMUM interest rate applied on premium designed using current cost of insurance and current interest rates from 1996.

Also to put some premium with rates classes together below are the monthly premiums for a male age 60 for a $100,000 policy using 20 year level term with a competitive insurer,

$80.67 Preferred Plus rate class;

$98.26 Preferred Non-Tobacco rate class;

$130.37 Standard Non-Tobacco rate class.

ALL premiums would be GUARANTEED not to increase for 20 years.

Does it make sense now why I keep saying SOMETHING IS WRONG for a $100,000 policy to implode after only 12 years on a male age 60 non-smoker with a monthly premium of $166.00?

...@ Mark, since you have the original illustration, please post it. Or e-mail it to me and I'll post it. Just black out any client identifing information.

cic7@juno.com

Posted: Mon Jun 30, 2008 05:44 pm Post Subject:

Thanks Lori, I appreciate the kind words.

For future reference; anytime I personally post something entitled Drama in Real Life, that's exactly what it is.

NOBODY even knows if Mark's original post was an actual case he's working on or just simply a made up story offered up for discussion.

Posted: Tue Jul 01, 2008 02:09 am Post Subject:

...switching sides...because the Devil is always in the details...

That's a pathetic policy Grandpa was sold from the start and the agent knew or should have known it was a pathetic policy AND the agent knew or should have known Grandpa (and everyone one else including me) runs the RISK of becoming UN-insurable in the furture as well as interest rates could and HAVE drastically declined since 1996.

Let me apply Gary's time tested method for determining if any policy should be offered to any client.

First test: Would I sell my mother a life insurance policy knowing full well it would LAPSE in 21 years at current cost of insurance and current interest rates? No.

Second test: Would I want to be the beneficiary on a life insurace policy knowing full well it would LAPSE in 21 years at current cost of insurance and current interest rates? No.

If any agent can't answer a definitive YES to both questions above then don't offer that product to your clients.

Now if the company or the agent CANNOT produce a signed illustration showing the client knew $166 per month was not enough premium to support the policy beyond life expectancy, (age 95 or above) then I say Mark has a case.

I'm glad we got that 12 year thing cleared up because that is the issue that made no sense to me using worst case senario.

Posted: Tue Jul 01, 2008 02:49 am Post Subject:

Thanks Gary. I truly appreciate your feedback.

Posted: Tue Jul 01, 2008 11:25 pm Post Subject:

Ya know Mark... IF I were an attorney representing Grandpa...I would hammer and hammer and hammer BOTH the agent and the insurance company for NOT making it abundantly clear to Grandpa under NO UNCERTAIN TERMS that the life insurance policy he bought WILL lapse in the 21st year as per the original illustration based on 1996 current assumptions or sooner IF interest rates crash or the company goes belly up.

NOBODY with one drop of common sense would buy that policy if they new up front when they reach life expectancy (age 81) the policy would lapse based on best case senario.

They would either pay more premium back in 1996 or they would have bought less coverage back in 1996 to protect themselves.

Also, I would hammer the fact IF Grandpa actually had a clear understanding of those fact he could have bought a new policy with a stable insurer BEFORE he became insurable. That option is now forever off the table.

This was a fun thread that I think does a good job at looking at both sides of these problems.