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Life Insurance Screwing My Mother/Father?

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Fumanchewd 26 Aug 18, 07:55Post
So my 71 year old dad (retired in 2016 after being an A/P mechanic for 50 years) isn't doing too well; he had bladder cancer a few times in the last 5 years and beat it. Well they did a CT and found it has spread all over to his kidneys, liver, lungs. They give him a 25% chance with treatment, but he has been hospitalized with hypotension, really bad edema with fluids that needs to be drained, jaundice, an his mental faculties aren't all there-possibly because of toxins not processed by his kidneys. This in addition to a bunch of urological issues that we don't need to bother mentioning. They will not let him even start treatment because of his weak condition and we don't know if he will be able to. Just seeing him I feel as though he won't last long unless he can magically get strong and active again.

Sooo, we are going through a lot right now. I was surprised to hear that he had a life policy for his age. My mother told me that she has just received a notice that their September payment is increasing from $70 a month to $2200 a month for a $225K policy that he has been paying for 30+ years. She claims they can't be aware of his medical history and thinks it is just an increase because of his age. The timing seems suspicious to me. My father in a moment of clarity or insanity (they are so difficult to distinguish at times), who is in and out of it, drew a big penis on the statement and told my mother to send it to them with no future payments. He was very upset as he saw this as a way to help her out as he doesn't have much to leave her, SS and a small 401k.

1. Do you guys think that this is normal for a life policy premium to increase that much in such a short amount of time right when my dad will most likely die? Could they have somehow found out about his medical condition? Do you think this should be investigated and reported or is this typical and legal?

2. My mother is an about to retire teacher without a lot of money, but enough to survive in their condo. It is morbid and not something to advertise, but she needs that life insurance policy. I am thinking of helping her out on the payments. I want my father to live, but it feels like we are betting for him to die, which is disgusting. But this is what a life insurance policy is for and my father would have wanted it that way. What if it happens in 1 month? What if he gets better after 2 years of paying more than my mortgage every month and then lives another 10 years?

I told my mother that we would help her pay for 3-6 months and re-evaluate how he is doing and then discuss our options. We are keeping him out of the loop, but he is asking questions about it.

I am also having her take the policy to a lawyer to confirm if it will pay out with the current situation, rather than paying the premiums to find out she wouldn't get the money because of an unknown contingency. Possibly, the lawyer can also advise if this premium increase is legal or ethical.

{crazy} {crazy}

Any advice?
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ANCFlyer (netAirspace ATC & Founding Member) 26 Aug 18, 10:27Post
Read the fine print in the policy.

I don't know who underwrote the life policy, but generally speaking, several things:

a) a reputable insurance company will not increase a life policy premium based on age unless it is a term limit policy. Always get whole life where the silly minded actuaries actually determine how long you will live (who knows how) and spreads the cost of the policy out over the length of the policy.

a1) If you buy your insurance late in life expect to pay a hell of a lot more than if you buy it young and hold on to it for the duration. Acturailly speaking, these bean counters spread the cost of your policy out over the length of time that you take out the policy and when they expect, statistically, you to die (of natural causes).

a2) Term policies don't work that way. There's where they get you. If you're 65 and grab a $50000 policy and you're not expected to live another 20 years, you're gonna pay.

a3) Get whole life or similar. Skip that term crap. Simple as that.

b) Back to reputable insurance companies . . . yes they actually exist. Look up Best's Guide to Insurance Companies. They are the go-to, the fuckin' BIBLE for insurance company ratings. You want- simply - a AAA rating. I could name a bunch but I'm not advertising. If you get into a shit company, remember this - you get what you pay for, or more to the point, you DON'T get what you pay for.

PM for further.

FYI, my life policy is 36 years old. Managed by the Principal. A AAA rated company.
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Fumanchewd 10 Nov 18, 04:57Post
As a finish up to this, my mother paid the life insurance on August 20 something as the premium was due 1 September. We didn't know at the time how long it would be, we figured at least months maybe years.

My father passed at 0130 1 September, so its good she paid the $2,200. My parents didn't plan too well for their retirement, no money saved. But they do have 401K, some pensions, and IRA, and SS. All in all they were pulling in enough money to last (about $60K a year) them but nothing saved. But my mother wanted to bury my father and had no cash to do it so we threw $50,000 on our credit cards (she bought a burial plot for themselves and my brother), hoping that it would pay out. It took a bit, but she finally got the payout last week, paid us back, and has a healthy bit left over.

Good thing she paid that premium or she would be in a hole. But since the premium payment was due the day he died (by a few hours), I suspect that she may be able to get a refund on it as well.

This has made me see the importance of life insurance, but also how difficult it can be to keep if the premiums go up with age.

Thanks for the advice ANC, I am looking for myself now. I have a policy through my work but its only for $100K and it won't be there if I make it to old age.
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