Please Help!

[TJScribes]

Hello all!

I came across this site while trying to find answers for my grandmother who seems to have been basically screwed by her agent. Hopefully someone here can help me find the answers she is looking for.

Here's the story…
In 1999, at the age of 70, my grandmother received a new agent who convinced her to transfer $7,419 into a $30,000 Flexible Premium Multifunded Life (ULII) Policy with MetLife. For the next 14 years she paid $400/semi annually towards the policy. Last month she received a letter from her agent informing her that she had to pay $650 before 2/5/14 or she would lose her policy. When we called the agent to find out what was going on her explained to us that the $800/year did not cover the cost of the policy so they deducted the difference from the amount transferred eventually leaving her with nothing. He further informed us that in order to keep the policy she would have to pay $300/month for now on. Of course, this is very upsetting to an 85 year old woman. She does not want to stop paying on the policy because of all the money she has put towards it. He also told us that there is nothing she can do to change her policy to something more secure because of her age. She is currently 85 years old.

My questions are…

If she pays the $300/month, how do we know we will not run into this problem again in a few months/years?

Is there anything we can do to get something more secure?

Is this legal?

What should be our next step?

I am totally lost and have no idea what we should do next. Any help, answers or clarity on what happened is greatly appreciated. I hope I provided enough info.

Thanks for reading.

 

[AnonymousOne]

If she pays the $300/month, how do we know we will not run into this problem again in a few months/years?
You do not know. Call the company and request an illustration at minimum interest with 300 per month.

Is there anything we can do to get something more secure?
Put it substantially more money. Request to reduce the death benefit.

Is this legal?
Unfortunately.

What should be our next step?
Request the illustration at 300 per month, see how long it is proposed to last. Consider keeping it if it makes sense, but be prepared to drop the policy if it's unaffordable. Due to her age of 85, the beneficiary can make a decision to pay some or all premiums, so not all is lost.

I am totally lost and have no idea what we should do next. Any help, answers or clarity on what happened is greatly appreciated. I hope I provided enough info.

Thanks for reading

 

[Newby]

Hello all! I came across this site while trying to find answers for my grandmother who seems to have been basically screwed by her agent. Hopefully someone here can help me find the answers she is looking for. Here's the story… In 1999, at the age of 70, my grandmother received a new agent who convinced her to transfer $7,419 into a $30,000 Flexible Premium Multifunded Life (ULII) Policy with MetLife. For the next 14 years she paid $400/semi annually towards the policy. Last month she received a letter from her agent informing her that she had to pay $650 before 2/5/14 or she would lose her policy. When we called the agent to find out what was going on her explained to us that the $800/year did not cover the cost of the policy so they deducted the difference from the amount transferred eventually leaving her with nothing. He further informed us that in order to keep the policy she would have to pay $300/month for now on. Of course, this is very upsetting to an 85 year old woman. She does not want to stop paying on the policy because of all the money she has put towards it. He also told us that there is nothing she can do to change her policy to something more secure because of her age. She is currently 85 years old. My questions are… If she pays the $300/month, how do we know we will not run into this problem again in a few months/years? Is there anything we can do to get something more secure? Is this legal? What should be our next step? I am totally lost and have no idea what we should do next. Any help, answers or clarity on what happened is greatly appreciated. I hope I provided enough info. Thanks for reading.

Yes. That is very common and is called Universal Life Insurance. The agent that sold it MAY have not understood it any better than the person buying it.

If she still wants insurance she should buy whole-life.

 

[Larry Tew]

Before we throw the agent under the bus let's not forget that in many cases the policyowner sees the in-force portion of the annual statement showing the lapse date or the cash value reversing year after year and either doesn't take the responsibility to find out what's going on - or they do know what's going on and procrastinate on taking any corrective action.

 

[jdeasy]

Before we throw the agent under the bus let's not forget that in many cases the policyowner sees the in-force portion of the annual statement showing the lapse date or the cash value reversing tear after year and either doesn't take the responsibility to find out what's going on - or they do know what's going on and procrastinate on taking any corrective action.

Yeah, but they forget all that stuff when it actually happens.

I met with a 78 year old lady last summer that has an imploding UL. Be completely gone in a couple of years unless she dumps in a ton of money and continues to do so.

Claimed she did't know about all of that but once we got the company on the phone and they told her the same thing she decided to apply for a whole life policy. Fully underwritten but she is in excellent health.

I got notice from the exam company that the ladt did not want to proceed. I called her and she said that she and her son had talked it over and she would probably die before the other one ran out so she's just keeping it.

I will bet now that she, or the son, will not have any memory of that in 2 years and she doesn't have insurance.

 

[LGilmore]

If the market still was what it was in 1999, things would probably be fine. The thing is markets change, up and down. What was projected to be the future in 1999 didn't happen the way they projected.... thus the problem.

 

[xrac]

This is why I like whole life policies.

 

[TJScribes]

Yes. That is very common and is called Universal Life Insurance. The agent that sold it MAY have not understood it any better than the person buying it.

If she still wants insurance she should buy whole-life.

We were told that she cannot change or purchase a different type of policy because she's now 85 years old.

 

[DHK]

This is why agents need to service what they sold... and stay in the business long enough to do so.

 

[WinoBlues]

If she pays the $300/month, how do we know we will not run into this problem again in a few months/years?
You do not know. Call the company and request an illustration at minimum interest with 300 per month.

Is there anything we can do to get something more secure?
Put it substantially more money. Request to reduce the death benefit.

Is this legal?
Unfortunately.

What should be our next step?
Request the illustration at 300 per month, see how long it is proposed to last. Consider keeping it if it makes sense, but be prepared to drop the policy if it's unaffordable. Due to her age of 85, the beneficiary can make a decision to pay some or all premiums, so not all is lost.

I am totally lost and have no idea what we should do next. Any help, answers or clarity on what happened is greatly appreciated. I hope I provided enough info.

Thanks for reading

All of the above plus, Find a premium she and or the beneficiary can afford. Let's say it is the $300. Order an inforce illustration solving for the death benefit $300. will buy and carry to age X. Most likely this is a mature at age 95 policy. Request this based on Current assumptions and on Guaranteed assumptions. Then make your decision. May be be better than buying a new Whole Life policy. Which depending on her health may or may not be an option.