Yes!! Nice information that you have shared with us.
Thank you very much

Very helpful posts.

I just registered in this forum because I was looking for a way to discuss the rip off that I think my little "burial policy" is that I bought through my Credit Union.

It is a $6000 policy that I have been paying on for 4 and a half years.

I recently complained about this policy to the State Insurance Department because supposedly there is a 27 day period beyond the 31 days grace period that it will pay out in and the insurance company refuses to set this 27 day policy out in writing in the policy.

Turns out the state law says they don't have to. They only have to put in writing the 31 days, so to me that 27 day policy is nonexistent and is some kind of sales propaganda or something.

It appears to me that this insurance company is in actuality doing several little tricks to prevent actually ever paying out the $6000 to my beneficiary upon my death.
Apparently all the little tricks are legal, but I bet if I had the data, it would be shown that of all these kinds of policies CUNA Mutual sells through my credit union, an extremely low percentage ever pay out. I also bet the state department of insurance does not even gather or keep current statistics on this.

That to me is a huge rip-off. But I see this forum is for the big guys, not little moneyed people like me who are being ripped off in a small way.

I need to decide whether to just stop paying on this rip-off policy because I sincerely believe this crooked insurance company is never going to pay, even if the claim is made promptly and if I was properly paid up on my premiums at the time of my death. I bet the insurance company even claims that they did not receive the premium payment in the mail by the due date or some such scam.

Nobody is watching the crooked insurance companies and the average person like me does not begin to understand the myriad of ways the insurance companies can rip the little people off.

Dachsie I read your post and I'm not sure what you are upset about but I'll try to shead some light on your grace period issue.

Yes, by state law most states mandate a 30 day grace period before a policy will lapse for NON-PAYMENT of premium.

That's one issue and is clearly written in the policy.

Now by "company practice" many companies will allow an additional 30 days BEYOND the grace period by which an insured can pay all back premium and have the policy re-instated WITHOUT new evidence of insurability.

That type of "company practice" would not and is not stated within the contract itself because it is not part of the contract but it is a "company practice" and they reserve the right to alter or amend their company practices.

Your comment below is wrong:
NO. They don't pay the death benefit after the grace period expires.

Once the grace period has expired you no longer have life insurance and if you die after the 31 day grace the company WILL NOT pay the death benefit.

The 27 day period you refer to after the policy has lapsed BY COMPANY POLICY is the period of time they are allowing you to RE-INSTATE your policy without submitting new evidence of insurabilty IF you pay all the back premium.

Some companies allow up to six months to re-instate a policy.

So my question to you is.....

Did you get behind or miss or stop making your premium payments?

I fail to see what the insurance company has done wrong.

Did I miss something?

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

GaryS.,
Thank you for your reply.

I found out about the "extended grace period of 27 days" accidentally in a phone conversation with an insurance company customer service person.

I did forget one premium and accidentally discovered I had forgotten. I promptly paid all premiums due within the 31 day "grace period". I bought the policy under the agreement they would send me a monthly statement and I would send a check. I did that without hitch for about three years, but then the ins. co. said they could not afford the stamp and the monthly statement and said I had to remind myself to pay premiums on time and use their coupon book. So, I forgot to check my calendar and was slightly late on one payment over about a 5 year period.

So I called customer service and asked just what would happen as far as payout to my beneficiary if I died and had missed a payment. She told me about the 31 day grace period but she also mentioned an additional 27 day extended grace period. She indicated that that extended period was also a period in which my beneficiary could collect on the policy. She seemed to be rather silent on this topic and wanted to change the subject and when I asked her if the 27 day extended grace period was written in my policy, she replied "no, that is not something we really want our policy holders to know about." Naturally that sounded illegal to me so I filed a complaint with the Insurance Dept.

Even in their reply to me, they did not make fully clear that the extended period has only to do with right to reinstate policy without having to "requalify." I only learned that from your post.

I think all of this information about the grace period ought to be made very clear.

Anyway, I read somewhere in this thread I think that a very small percentage of these kinds of small "whole life" policies ever end up paying out. I am still looking for some data on that. Unfortunately it apparently is not one of the functions of the Texas Dept. of Insurance to put out studies and pamplets informing the public about what percentage of the time these policies and these companies actually deliver what they sold.

Of course, the whole economy is going bust now and with AIG's fall, the whole insurance industry is looking more corrupt than ever, even to those of us in the general public who are uninformed as to accurate and complete insurance data.

I think the average person would be wise to just set aside their premium amount to a separate private fund for their "burial policy" and not send a monthly donation to an insurance company. But no one will educate the average person about the pitfalls of insurance.

You're welcome.

__________________
Gary Spicuzza, *SAFE
Copyright 1956.
No Rights Reserved.
*Self Appointed Financial Expert

Life insurance is not really base on your preference but it all depends on your ability to pay the monthly premiums. Your preference might be to purchse a whole life insurance but you cannot afford it.
that's why I said it depends on your ability to pay your monthly premiums and it also depends on what your needs are.
If you are a new dad or just starting a new family, then the best I guess is a term life insurance which is a lot cheaper than the other types of permanent life insurance.

Just my 2 cents
Shell

In all honesty, I believe you all have valid points. The fact is, all of our views concerning these products are mostly dependent on our own personal experiences as well as our education level on said products. I would be honored if you all would cosider joining the forum I recently started through my own company. If you have a forum/blog that you would like to promote, please feel free to do so there. Also, please send me any links you have for your own forums. It would be my pleasure to join yours and offer my input there as well!!! Thanks.

fwoodfin
www jwgfinancial com
discuss jwgfinancial com

In my humble opinion, most people need $500,000 or more of life insurance.

Term Life Insurance is a great product - make sure you have convertibility ability.

And don't forget to buy "some" permanent UL or WL. There are actually some good UL's out there now.

Great tips. Loved "5. Keep your investing and insurance strictly separate. There are better places to invest - and without the high commissions of whole-life policies." I made the mistake of the other way around when I was young.