LI Company Not Paying Out Death Benefits in Full

Stretto

New Member
2
My father just passed away and my mother had life insurance through her company on him.

The company she works for changed names and seemingly moved over to a new LI company. At first when she talked to them she was told that she would get the full benefits and she would just have to wait on processing. When she called again and talked to someone else she was first told that they had no record of her and that she would have to get the company to fax over info, etc.

Now they are saying she will only get about 1/2 the benefits due to the age of my father. (and, of course, they still have to adjudicate to see if they will pay out at all)

She has no documents from the original policy due to it being work related and her ignorance about such things.

Do insurance companies generally add an age limit clause where LI benefits are cut in half automatically?

Any advice on how to proceed? My mother needs the money ASAP to pay off medical bills, etc and so far they seem to be trying to finagle out of it. The male that is handling the case seems to be trying every tactic to either reduce or deny the claim. What complicates the matter is the switch over, since no documents were given(as far as we know).


I believe the policy was a 20yr term and she's been paying on it for 17 years.

Thanks.
 
Without the paperwork it is hard to say. Was it really a 20 year term, or is that just what she thought it was?

Companies do change benefit providers from time to time. It may have simply been a group term policy and subject to change at any time. If so, most do have a reduction in benefit based upon age.

So again, without seeing the paperwork, we can only guess at it.
 
More than likely a group term plan as those are known to reduce the death benefit at certain ages. They give a level premium instead in trade off.

It's going to take a while with the business being sold, she needs to seek the HR department out and confirm records or what insurance company they had before as they will have the information.


Hopefully, from this if you haven't purchased your own policy yet, you will. Too many people leave it up to the company to provide life insurance for them and too many people end up in these situations.
 
Well, since insurance is a ponzi scheme anyways, I personally won't participate in such evil that has been perpetrated on humanity by lazy, immoral, and unethical people. Eventually the pyramid will collapse... So, no, I won't fall for the "You need insurance" BS that only enriches the insurance companies pockets.
 
So is Social Security... but at least insurance is a VOLUNTARY contract, rather than one imposed and forced by the federal government.

Considering that companies pay out benefits, it is the most MORAL and ETHICAL ponzi scheme in existence.
 
Well, since insurance is a ponzi scheme anyways, I personally won't participate in such evil that has been perpetrated on humanity by lazy, immoral, and unethical people. Eventually the pyramid will collapse... So, no, I won't fall for the "You need insurance" BS that only enriches the insurance companies pockets.

Well good luck to you then. Personally, I could give two shites what you do or think. Not my family to worry about. Mine is taken care of. You do what you want to do or not. Your choice.
 
Well, since insurance is a ponzi scheme anyways, I personally won't participate in such evil that has been perpetrated on humanity by lazy, immoral, and unethical people. Eventually the pyramid will collapse... So, no, I won't fall for the "You need insurance" BS that only enriches the insurance companies pockets.

Tell that to my 47 year old wife who is recovering from a brain tumor - our insurance company increased her benefits no questions asked and have stopped charging us for her premiums.

You can stand on that philosophy all you want...but it will be at the expense of your family who may depend on you to survive (assuming you work for a living). The real issue here is your parents most likely failed to do some proper planning, didn't know what they did/did not buy and now you are trying to blame the insurance industry.
 
My father just passed away and my mother had life insurance through her company on him.

The company she works for changed names and seemingly moved over to a new LI company. At first when she talked to them she was told that she would get the full benefits and she would just have to wait on processing. When she called again and talked to someone else she was first told that they had no record of her and that she would have to get the company to fax over info, etc.

Now they are saying she will only get about 1/2 the benefits due to the age of my father. (and, of course, they still have to adjudicate to see if they will pay out at all)

She has no documents from the original policy due to it being work related and her ignorance about such things.

Do insurance companies generally add an age limit clause where LI benefits are cut in half automatically?

Any advice on how to proceed? My mother needs the money ASAP to pay off medical bills, etc and so far they seem to be trying to finagle out of it. The male that is handling the case seems to be trying every tactic to either reduce or deny the claim. What complicates the matter is the switch over, since no documents were given(as far as we know).


I believe the policy was a 20yr term and she's been paying on it for 17 years.

Thanks.


It depends on what the policy is. I have a policy from a former employer. It's $40K now and has been for 25 year. And it will stay $40K until age 65. At age 65 it starts reducing over a 2 and half year period. It goes down 1/30th or $1200, every month until age 67 and a half. At that point it's a $4K policy. It remains a $4K policy for the rest of my life.

That's a not a good policy. It's not something I would buy nor something I would sell. But I don't pay for it. So I am willing to let them give it to me.

That is just one example of why a person should have life insurance that they own separate from their work.

I just met with some retirees last week that had policies from their former employers. Both of their coverage had changed carriers a couple times. But still in force. His had reduced from $40K to $19K to $13K and was going to end at age 75 unless he continued with a $10K conversion at $140/mo.

Her's had reduced over the years from $50K to $15K and would stay $15K now until age 81 when it ends.

It's quite normal for group policies to change. The abnormal is to find one that doesn't.
 
More than likely a group term plan as those are known to reduce the death benefit at certain ages. They give a level premium instead in trade off.

It's going to take a while with the business being sold, she needs to seek the HR department out and confirm records or what insurance company they had before as they will have the information.


Hopefully, from this if you haven't purchased your own policy yet, you will. Too many people leave it up to the company to provide life insurance for them and too many people end up in these situations.

What percentage of people that wind up with termed out term or poor group plans have been offered individual permanent insurance multiple times in their life time?
 
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