Should I cancel my whole life policy?

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Spyder59
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Re: Should I cancel my whole life policy?

Post by Spyder59 » Thu May 25, 2017 2:58 pm

You may well want to file a complaint with your state insurance department. Given that this is life insurance, and you do not appear to need this much insurance, if any, you should consider raising the issue of the "suitability" of the sale. Many state insurance codes provide a general suitability standard for the sale of insurance. You can review my post on April 22 of this year for more suggestions about how to pursue the rescission of your policy.

ray333
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Re: Should I cancel my whole life policy?

Post by ray333 » Thu May 25, 2017 3:07 pm

You shouldn't even be thinking about life insurance right now

Funny, this kind of nonsense is why I ultimately ditched my financial advisor for Boggleheads.

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powermega
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Re: Should I cancel my whole life policy?

Post by powermega » Thu May 25, 2017 4:05 pm

I don't believe a 1035 exchange would be possible unless the surrender value is greater than the minimum lump sum premium for an annuity. That minimum premium could be a number like $10k.
Even a stopped clock is right twice a day.

Benton Bair
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Re: Should I cancel my whole life policy?

Post by Benton Bair » Thu May 25, 2017 4:24 pm

Don't wait any longer. Contact the Pennsylvania Insurance Department, Bureau, Consumer Services, Carolyn Morris, Director
(717) 783-2153. Refer to your written request and ask what and when the Department investigator will do for you. Make written notes of phone conversation. Next level is a Deputy Insurance Commissioner but the Bureau Director will not allow this to go that far. Best wishes.

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BL
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Re: Should I cancel my whole life policy?

Post by BL » Thu May 25, 2017 5:17 pm

powermega wrote:I don't believe a 1035 exchange would be possible unless the surrender value is greater than the minimum lump sum premium for an annuity. That minimum premium could be a number like $10k.
I expect you are right and it is not likely to amount to anything like that amount.

XDark_FenixX
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Re: Should I cancel my whole life policy?

Post by XDark_FenixX » Thu May 25, 2017 11:26 pm

For clarification, I have spoken to the agent's manager, who also happens to be the president of their financial company. In a nutshell he claims that they do not have the authority to rescind the policy or be able to provide a refund and subsequently forwarded my complaint to Guardian since my contract is with them. Based on what I've gathered, it just seems like there isn't much anyone can do till Guardian gives a response and that's really what I've been waiting on. Do I feel like I should be able to do more? Absolutely. But I don't necessarily have the time to be consistently hounding the wrong people or sharing my story to deaf ears either. I'm finding there are quite a few responsibilities I must take now that my father has passed.

I have been sending weekly emails to the complaint investigator at Guardian and she finally has a timeframe for me (a response by early next week) so hopefully things turn out well! I'm expecting the state insurance board will be receiving the same response and should it be negative hopefully I can work with them to escalate. Although I may call that line Benton provided just so I know what my options are. If I haven't said it before, I am deeply indebted to the brain trust here.

pintail07
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Re: Should I cancel my whole life policy?

Post by pintail07 » Fri May 26, 2017 8:53 am

Look at the application attached to the policy and see what was written down by the agent as to the purpose of the insurance. In addition, who is named a s beneficiary and what is their insurable interest. All my carriers look carefully at the reason and the insurable interest. Also, remember, Guardian won't lose a penny if they refund your entire premium because they will claw back the commissions from the agent and the manager. Wait for their response.

XDark_FenixX
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Re: Should I cancel my whole life policy?

Post by XDark_FenixX » Sat May 27, 2017 6:07 pm

pintail07 wrote:Look at the application attached to the policy and see what was written down by the agent as to the purpose of the insurance. In addition, who is named a s beneficiary and what is their insurable interest. All my carriers look carefully at the reason and the insurable interest. Also, remember, Guardian won't lose a penny if they refund your entire premium because they will claw back the commissions from the agent and the manager. Wait for their response.
Thank you for all your help and encouragement throughout this process. I did mention that, but the bulk of it is blank and it mostly just says "hold for issue instructions." Kind of suspicious. The only named beneficiary is my retired mother who does not need a penny of my death benefit to maintain her lifestyle, so I'm sure I should be ok in that regard.

I was looking through my texts to lay out a full story today and I noticed the agent sent the following text to me "The Roth is no different then the cash values in your life insurance policy." And with that I think I can definitely prove they misled me in bad faith even in court if I have to. The bulk of the other presentations were in person/via powerpoint so unfortunately I wouldn't be able to provide that information. I'm definitely feeling a lot better about things now, even if Guardian somehow does not refund me.

pintail07
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Re: Should I cancel my whole life policy?

Post by pintail07 » Sat May 27, 2017 7:26 pm

Ask for a copy of the final answer to the question, purpose of insurance. Did you sign off on the final answer? Big issue. Ask for a complete copy of your file including copies of presentation and all correspondence. He has the records, required by securities law. Unbelievable that they accepted your mother as beneficiary without a detailed explanation. Guardian will cave, guaranteed. If not, hire an independent expert on these matters.

Benton Bair
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Re: Should I cancel my whole life policy?

Post by Benton Bair » Sat May 27, 2017 8:26 pm

pintail07 wrote:Ask for a copy of the final answer to the question, purpose of insurance. Did you sign off on the final answer? Big issue. Ask for a complete copy of your file including copies of presentation and all correspondence. He has the records, required by securities law. Unbelievable that they accepted your mother as beneficiary without a detailed explanation. Guardian will cave, guaranteed. If not, hire an independent expert on these matters.
I agree with you that Guardian will make the owner of the life insurance whole. Securities law only applies if the contract is a variable product and from the description I don't have that impression. I don't understand why the mother as beneficiary would be considered an issue. I don't think any carrier would doubt her at all. Why do you?

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JonnyDVM
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Re: Should I cancel my whole life policy?

Post by JonnyDVM » Sat May 27, 2017 8:35 pm

Wow. They really took you for a ride. And this is why people here hate financial advisors. Someone pocketed 50% of your money selling you that garbage. Cancel it.

Your other option- you could die. Make them cough up the 3 million. That'll show em.
Sometimes the questions are complicated and the answers are simple. -Dr. Seuss

itstoomuch
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Re: Should I cancel my whole life policy?

Post by itstoomuch » Sat May 27, 2017 9:39 pm

Since you paid in advance for 1 year of coverage, you may well keep the policy for the 1 year.
If you are currently maxed out on 401k, IRA, I would think that you have the analytical skills to discover your answer. Tell us why your decision? YMMV.
Don't cancel the current policy until you have a replacement policy. The questions are whether you "need-want" insurance and are you eligible for "good" rates.

notes; We bought a policy for our 17.5yo (now 32) as he was heading off to college. I think it was for $350/yr, 350k coverage, term 10,15,20 year, preferred. We were full pay parents, $38k-42k?/yr tuition,R&B. Student loans taken, ~$100k on the aftermath of 9/11. He currently has good income, single, homeower.
Rev012718; 4 Incm stream buckets: SS+pension; dfr'd GLWB VA & FI anntys, by time & $$ laddered; Discretionary; Rentals. LTCi. Own, not asset. Tax TBT%. Early SS. FundRatio (FR) >1.1 67/70yo

pintail07
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Re: Should I cancel my whole life policy?

Post by pintail07 » Sun May 28, 2017 9:12 am

Benton Bair wrote:
pintail07 wrote:Ask for a copy of the final answer to the question, purpose of insurance. Did you sign off on the final answer? Big issue. Ask for a complete copy of your file including copies of presentation and all correspondence. He has the records, required by securities law. Unbelievable that they accepted your mother as beneficiary without a detailed explanation. Guardian will cave, guaranteed. If not, hire an independent expert on these matters.
I agree with you that Guardian will make the owner of the life insurance whole. Securities law only applies if the contract is a variable product and from the description I don't have that impression. I don't understand why the mother as beneficiary would be considered an issue. I don't think any carrier would doubt her at all. Why do you?
The agent was handling securities for the OP, he is required to keep all records even for non security transactions. Regarding his mother as beneficiary,, what insurable interest is there? Would she be financially impacted by his death? That would need to be described in the question, purpose of insurance.

afan
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Re: Should I cancel my whole life policy?

Post by afan » Sun May 28, 2017 12:35 pm

It has been a long time since I shopped for life insurance. At the time the agents would not put anything in writing. I would email to ask a question and they would call me to discuss. It surprised me to hear that anyone would get something substantive about the policy in writing. I told my agents that I was only interested in things in writing. They did not start writing things down, but they did give up on calling.

If you have something other than the policy to hold them to, good for you. My policies all say that they contain the entire contract and nothing outside the policy is binding on the company. But that does not mean that would work in court.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

Benton Bair
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Re: Should I cancel my whole life policy?

Post by Benton Bair » Sun May 28, 2017 2:29 pm

pintail07 wrote:
Benton Bair wrote:
pintail07 wrote:Ask for a copy of the final answer to the question, purpose of insurance. Did you sign off on the final answer? Big issue. Ask for a complete copy of your file including copies of presentation and all correspondence. He has the records, required by securities law. Unbelievable that they accepted your mother as beneficiary without a detailed explanation. Guardian will cave, guaranteed. If not, hire an independent expert on these matters.
I agree with you that Guardian will make the owner of the life insurance whole. Securities law only applies if the contract is a variable product and from the description I don't have that impression. I don't understand why the mother as beneficiary would be considered an issue. I don't think any carrier would doubt her at all. Why do you?
The agent was handling securities for the OP, he is required to keep all records even for non security transactions. Regarding his mother as beneficiary,, what insurable interest is there? Would she be financially impacted by his death? That would need to be described in the question, purpose of insurance.
I didn't read any where the agent was handling securities of the OP. I must have missed that. I can think of no major insurance company underwriter, or others, questioning naming an immediate family as beneficiaries. The application may ask for reason but that would ordinarily pertain to other than immediate family members. Sometimes young applicants wanting to protect insurability or over fund a policy may use an obvious beneficiary as a place holder. Maybe during a phone interview by home office staff/contractor the subject may arise, but I've never known of a declination. Have you?

pintail07
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Re: Should I cancel my whole life policy?

Post by pintail07 » Sun May 28, 2017 3:20 pm

Benton Bair wrote:
pintail07 wrote:
Benton Bair wrote:
pintail07 wrote:Ask for a copy of the final answer to the question, purpose of insurance. Did you sign off on the final answer? Big issue. Ask for a complete copy of your file including copies of presentation and all correspondence. He has the records, required by securities law. Unbelievable that they accepted your mother as beneficiary without a detailed explanation. Guardian will cave, guaranteed. If not, hire an independent expert on these matters.
I agree with you that Guardian will make the owner of the life insurance whole. Securities law only applies if the contract is a variable product and from the description I don't have that impression. I don't understand why the mother as beneficiary would be considered an issue. I don't think any carrier would doubt her at all. Why do you?
The agent was handling securities for the OP, he is required to keep all records even for non security transactions. Regarding his mother as beneficiary,, what insurable interest is there? Would she be financially impacted by his death? That would need to be described in the question, purpose of insurance.
I didn't read any where the agent was handling securities of the OP. I must have missed that. I can think of no major insurance company underwriter, or others, questioning naming an immediate family as beneficiaries. The application may ask for reason but that would ordinarily pertain to other than immediate family members. Sometimes young applicants wanting to protect insurability or over fund a policy may use an obvious beneficiary as a place holder. Maybe during a phone interview by home office staff/contractor the subject may arise, but I've never known of a declination. Have you?
I sure have encountered this issue. Perhaps the mother had an insurable interest, that would have been disclosed in the answer to purpose of insurance. Never seen an answer on the application that is on OP's application. At a minimum I would assume when the answer to the question was declared at some point there would have been an amendment showing the answer to the question. His 29 year old agent with only one year experience in the business is sweating big time facing a huge chargeback. Hope he changes his practices or forced out of the business. He will also miss those double digit renewal commissions.

XDark_FenixX
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Re: Should I cancel my whole life policy?

Post by XDark_FenixX » Mon May 29, 2017 4:51 pm

pintail07 wrote:
Benton Bair wrote:
pintail07 wrote:
Benton Bair wrote:
pintail07 wrote:Ask for a copy of the final answer to the question, purpose of insurance. Did you sign off on the final answer? Big issue. Ask for a complete copy of your file including copies of presentation and all correspondence. He has the records, required by securities law. Unbelievable that they accepted your mother as beneficiary without a detailed explanation. Guardian will cave, guaranteed. If not, hire an independent expert on these matters.
I agree with you that Guardian will make the owner of the life insurance whole. Securities law only applies if the contract is a variable product and from the description I don't have that impression. I don't understand why the mother as beneficiary would be considered an issue. I don't think any carrier would doubt her at all. Why do you?
The agent was handling securities for the OP, he is required to keep all records even for non security transactions. Regarding his mother as beneficiary,, what insurable interest is there? Would she be financially impacted by his death? That would need to be described in the question, purpose of insurance.
I didn't read any where the agent was handling securities of the OP. I must have missed that. I can think of no major insurance company underwriter, or others, questioning naming an immediate family as beneficiaries. The application may ask for reason but that would ordinarily pertain to other than immediate family members. Sometimes young applicants wanting to protect insurability or over fund a policy may use an obvious beneficiary as a place holder. Maybe during a phone interview by home office staff/contractor the subject may arise, but I've never known of a declination. Have you?
I sure have encountered this issue. Perhaps the mother had an insurable interest, that would have been disclosed in the answer to purpose of insurance. Never seen an answer on the application that is on OP's application. At a minimum I would assume when the answer to the question was declared at some point there would have been an amendment showing the answer to the question. His 29 year old agent with only one year experience in the business is sweating big time facing a huge chargeback. Hope he changes his practices or forced out of the business. He will also miss those double digit renewal commissions.
My mother does not have an insurable interest. She is retired and does not rely on me for income/lifestyle at all. She technically is a placeholder, but a placeholder for no one as there really is no one else I could have named my beneficiary. If Guardian somehow provides a negative decision I'll definitely pursue these other methods, so I do very much appreciate you explaining them. I am actually going to talk to the state investigator handling my complaint and request that he investigates the agents to hopefully suspend/revoke their licenses. Again, thank you so much for your help and I'll be sure to keep everyone updated! I'm sure many people have/will come with the same issues and all this information is definitely not otherwise something you would know to look for in the heat of the moment.

pintail07
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Re: Should I cancel my whole life policy?

Post by pintail07 » Tue May 30, 2017 1:21 pm

I bet Guardian will give you their decision very soon. If not within a couple of weeks turn up the heat. There are so many holes in this they really don't have a leg to stand on.

s0me0nesmind1
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Re: Should I cancel my whole life policy?

Post by s0me0nesmind1 » Tue May 30, 2017 1:47 pm

mohawk234 wrote:Disclosure: I like several aspects of whole life policies sold by mutual life companies. I don't work for one, I don't sell insurance, and nobody I know or am related to is in the insurance business. However, at age 50 I am very glad my father bought a policy for me when I turned 20 and glad I purchased my own about five years later. I own policies from The Guardian.

Here are some things I like: when my level term expires in ten years I will still own these whole life policies. This gives me confidence and comfort knowing that the death benefit, which has grown and will continue to grow significantly, will be there for my wife, my children, and my grand children. Another thing: I have easy access to the cash value now or in the future. In fact, I've used part of the cash value a few times along the way. Another thing: I never thought of my policies as investments. My dad explained my first policy as a foundation, and from where I sit today it's always been that way. I have a Roth and a 401k as well. The biggest difference is that I know the minimum value of my whole life policies today and every year that I'm alive up to age 95. I can't say the same is true for my retirement accounts. I believe that they will perform, but that's far different than a guarantee.

I really don't know if that policy of yours is the right thing for you. It looks like your agent either rushed you or didn't explain it all clearly enough. But it sure looks like the 13k premium isn't a stretch for you given that you had investment accounts planned.

I suggest taking a deep breath. Give this policy some time, and give yourself some time to learn about whole life. You might, like myself, be happy that you bought this a short 25 years from now. Heck, based on your illustration, it looks like you will be done paying premiums if you choose in year 7.

Good luck.
Registered and posted specifically to defend whole life policies.

This doesn't look suspicious or anything. :D

:moneybag :moneybag :moneybag :moneybag

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Hub
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Re: Should I cancel my whole life policy?

Post by Hub » Tue May 30, 2017 2:11 pm

Thanks for all the follow ups Dark_Fenix. Others will be able to learn from your experience here and that's worth a lot. Good luck with a positive outcome.

Theoretical
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Re: Should I cancel my whole life policy?

Post by Theoretical » Tue May 30, 2017 3:47 pm

The good news: except for the awful-tastic 1st year, it seems to be a well-structured whole life policy (you must be insanely healthy to get that premium for 1.4 million) that as was mentioned, means you won't have to pay after year 7.

The bad news: It's still a whole life policy.

The other bad news: These are often very occlusive policies, and while the returns can be good internally, you're also taking significant creditor risk for what is essentially a bond/stock/alts quasi-hedge fund. In light of that, if you keep the policy, treat it as mostly/all bond.

If the policy was really structured optimally, there'd be a maximum number of payments you're allowed to make, usually around 5-7, and the policy should be right under the Modified Endowment Contract thresholds. I can't tell if this one actually is or is not. But if it was not, then you won't get the returns listed here at all. If it's structured to your maximum benefit, there should be a point within the next 7 years where you are maxed out on premium paid.

XDark_FenixX
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Re: Should I cancel my whole life policy?

Post by XDark_FenixX » Mon Jun 05, 2017 12:18 pm

Update: I received Guardian's response today. Unfortunately it was not positive. In a nutshell, they don't think it is wrong to have sold me whole life insurance and they did not find any evidence of wrongdoing. I forwarded the response to the state investigator and he basically just said there doesn't seem like he can do anything about it since state laws regarding insurance have not been broken.

Not sure what next steps may be. I did send a message to the state insurance department director last week and she basically just forwarded my message to the state investigator. Maybe public siege? What it comes down to is no one is going to admit wrongdoing even though the whole thing stinks.

XDark_FenixX
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Re: Should I cancel my whole life policy?

Post by XDark_FenixX » Tue Jun 06, 2017 8:08 am

Small update. I provided the state insurance investigator with the text message from the agent and we're seeing if that goes anywhere. This might as well be a court case because it seems like Guardian and the state insurance department aren't going to help without hard evidence.

XDark_FenixX
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Re: Should I cancel my whole life policy?

Post by XDark_FenixX » Fri Jun 16, 2017 10:23 am

Final update: VICTORYYYYYYYYYY. Guardian just sent me an email letting me know that they will be offering me a full refund.

I wanted to thank everyone here for the advice and support, especially pintail and Benton, or I never would have even thought of trying to get a refund in this manner.

I encourage anyone else who has recently purchased whole life to gather every piece of hard evidence they have and make your case. It took almost 2 months but it was definitely worth it!
Last edited by XDark_FenixX on Fri Jun 16, 2017 11:35 am, edited 1 time in total.

Silk McCue
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Re: Should I cancel my whole life policy?

Post by Silk McCue » Fri Jun 16, 2017 10:34 am

Congratulations! Very happy for the outcome and that others here gave you advice and encouragement that helped make it happen. Enjoy an extra nice evening out this weekend to celebrate!

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Hub
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Re: Should I cancel my whole life policy?

Post by Hub » Fri Jun 16, 2017 11:33 am

Great news! Today, OP delivered.

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EATaxGuy
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Re: Should I cancel my whole life policy?

Post by EATaxGuy » Fri Jun 16, 2017 11:39 am

David 1
Goliath 0

As it should be!
:sharebeer
You may have been handed a cactus, but sitting on it is up to you.

Nate79
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Re: Should I cancel my whole life policy?

Post by Nate79 » Fri Jun 16, 2017 12:44 pm

Wow, that's great. Shows perseverance pays off!

gr7070
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Re: Should I cancel my whole life policy?

Post by gr7070 » Fri Jun 16, 2017 12:50 pm

That's great!

Do you have any indication as to what turned it around? Was it the text and the state investigator that prompted this reversal or something else?

XDark_FenixX
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Re: Should I cancel my whole life policy?

Post by XDark_FenixX » Fri Jun 16, 2017 1:30 pm

gr7070 wrote:That's great!

Do you have any indication as to what turned it around? Was it the text and the state investigator that prompted this reversal or something else?
I'm pretty sure it's the text. I technically did provide it to both the state investigator and guardian before but it appears to have been overlooked. When I provided the first guardian response to the state agent he basically just folded too. It was only when I asked whether the statement that cash values were the same as a Roth IRA was a breach of state law did he change his tone. He admitted to overlooking it and resubmitted that as evidence for reopening my case with guardian. I sent a message to the guardian agent with that text again as well. In my opinion their initial denial was so one-sided that I guess having definitive proof to substantiate my story forced them to cave?

trixie449
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Re: Should I cancel my whole life policy?

Post by trixie449 » Mon Jun 26, 2017 2:23 pm

XDark_FenixX wrote:Final update: VICTORYYYYYYYYYY.
Woohoo!

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