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Insurance Carrier: Life Of Georgia: Now Jackson Life Ins.
My father bought two policies in 1995-1998 at the age of 74-77. He could not read, but signed the life insurance policy for $2,000 at $34.76- $36.00 a month. Now he is 87 years old and has paid $9,742.00 for these policies. The insurance agent at Jackson life told me that at the time of my father's death the policy will pay only $2,000 each, and if I stop paying it now, it will be about $1,300. And when he is 100 years old the policies will be paid off. My complaint is why would an insurance company take advantage of an old man that did not know how to read. Wrote two policies that would not be paid out until he was one hundred years old. And the face value would be $2,000. How can I fix this? Will you please help me to get his money back or what do I need to do?
Insurance Expert Answer:
You seem to be saying that life insurance for most older people makes no sense, and generally you're right.That does not stop life insurance companies and agents from trying to sell insurance to people who want to buy it or are persuaded to buy it. With the benefit of hindsight there is no reason your father should have bought the policy. He was paying $420 or so a year for $2,000 of coverage. Within 5 years he would have paid the $2,000 face amount.
Insurance is not magic. It is a zero sum game. The premium of folks who live long really serve to pay the claims for those who die young or sooner. Had your father died at 75 he would have paid 12 months premium ($400) and his heirs would have received $2k. Now he could have figured that out when he bought the policy, and should have. And shame on the company and agent that sold it to him -- they are taking advantage of the old and the gullible.