Whole life insurance at age 80
Terry, at 80 my mother bought a 10,000 thousand dollar whole life policy from Mutual of Omaha my sister mother and I shared the $98 payment now 10 years later we have put $11,000 into the policy and it only has a cash value of $4050 they said sorry.
Mom still has a few years to live and we would be throwing away basically 95% of our payments just to keep the policy going. I cashed it out and we are going to put it in a super saver savings policy at my credit union for 3% did I do the right thing? is there any recourse to retrieve tge rest of the 10,000? that was a rip off.
I won’t cash the check till after April. Thank you and I love you on WGN too.
Terry Says
This is the fallacy of buying life insurance at an advanced age. And this policy seems particularly egregious. Obviously, it was done with the intent of leaving “burial money’ — but you/she would have done much better just putting the money in the bank!
But who knew then how long she would live?! If she had died a year later, you would have been the winner. But since she lived so long, the insurance company came out the winner– collecting more than it would ever have had to pay out!
In fact, you might even have a tax obligation on the sale of that policy, adding insult to injury. You can cash the check at any time. But save the money for her funeral. And be sure to contact the insurance company and ask them if you are going to get a 1099 income tax form for any portion of that money.
