My mother has a whole life insurance police. Can she surrender the policy for the cash value? She's 86 yrs old?

February 8th, 2010 by admin

10 Responses to “My mother has a whole life insurance police. Can she surrender the policy for the cash value? She's 86 yrs old?”

1. miley cyrus Says:
   February 8th, 2010 at 4:59 am

   Best Answer – Chosen by Voters If your mother is the policy owner, which is very possible, then the answer is yes.If someone else is the policy owner, then the answer would be no. Only the policy owner can surrender the policy.Some questions you should ask:1) Is the policy even active? Has your mom been paying it? If she hasn't been paying it for awhile (like over 1 or 2 years), then its very likely the policy has lapsed.2) Which one is more important to you? Receiving the cash value to pay for the nursing home or waiting until she passes away and claim the death benefit?3) In addition to question 2, who is the named beneficiary in the life insurance policy? Of course, this question doesn't matter if the policy is going to be surrendered. However, its good to find out since you really don't know when your mom will pass away. Source(s): http://finance1o1.blogspot0o0com

2. selena gomez Says:
   February 8th, 2010 at 4:59 am

   Okay, the life insurance plan isn’t for her but for the beneficiary. May be you would need to consider the interests of the beneficiary before deciding about the policy. If you now surrender the policy you would receive much less than the death benefit. Moreover, it’d attract taxes on the gain. I think the decision should depend upon the amount of cash value. And, at her age, I personally wouldn’t have surrendered the policy.May be you would find some more information in the following community discussion.http://www.ampminsure.org/life/about5156.html

3. taylor swift Says:
   February 8th, 2010 at 4:59 am

   Yes.Before she can qualify for Medicaid, she will need to liquidate the policy.Before you contact the insurance company to surrender the policy, talk to an agent about a Life Settlement. With a Life Settlement, investors buy the policy from your mother most often paying more than the cash surrender value. Since your mother is in a Nursing Home, you may receive something close to the face value (death benefit) Talk to an agent that has done a Life Settlement before. Do it today. It takes time to get a full settlement.You should also talk to a lawyer (if you have not already) since your mother would not be competent to sign the paperwork for this transaction. Whoever has Power of Attorney will have to sign.Good Luck.

4. justin bieber Says:
   February 8th, 2010 at 4:59 am

   A very clinical answer.You need to make the following sum:How much is the premium she pays on the policy.How much to you stand to inherit when she dies.How much are you still going to have to pay to the nursing home.It might be better to still "invest" in her policy and the nursing home if the "payout" of the policy is a lot.The short term solution of surrendering the policy might cause more long term issues.Hope this makes sense.

5. selena gomez Says:
   February 8th, 2010 at 4:59 am

   Not only can see, but Medicaid may force her to do so. If you can avoid it then do so. You may want to transfer the ownership to someone else in the family for the value of the cash value in lieu of cancelling it. Otherwise you're totally giving up the difference between the cash value and the death benefit.

6. taylor swift Says:
   February 8th, 2010 at 4:59 am

   Holy Cow…2 "top contributors answers", 2 answers completely WRONG!!!!"If the death benefit is $100,000, the cash value is likely around $15,000, maybe a little higher."Where in god's name did you pull these numbers from? You couldn't be further from the truth."One option may be to transfer the ownership of the policy and the beneficiary to a trust so the assets will not count toward SSI or Medicaid."Do you know what the look-back period is?First, check to see if there's a accelerated death benefit on the policy which may pay the long-term care needs. Second, talk to an financial planner, not a Property and Casualty underwriter, and get an in-force illustrations to see the real numbers. Source(s): I think I'm going to puke reading some of these answers!

7. lady gaga Says:
   February 8th, 2010 at 4:59 am

   It is a Very, Very, Very, Very BAD idea to cancel the policy.There will probly be a taxable gain on the policy if you do. So, ask the insurance agent or company about any taxable gain first before you decide to cancel. You may also loose out on some money on top of that.One option may be to transfer the ownership of the policy and the beneficiary to a trust so the assets will not count toward SSI or Medicaid. Call SSI and the Medicaid worker or an SSI attorney or one that handles trusts and ask. Source(s): http://www.ssa.govNot an attorney. Just suggestions and not legal advice.

8. Vanessa Hudgens Says:
   February 8th, 2010 at 4:59 am

   Yes. She can cash surrender the policy. But I wouldn't recommend it for a couple of reasons. First of all, cash currender value is going to be minimal compared to the death benefit face value. Second, where are you going to get the money to pay for her burial when she passes away with no life insurance policy. Thirdly, you probably won't be able to get her a replacement policy later on. She's 86 with Alzheimers. IF any insurance company insures her, you're going to pay through the nose. My company brokers through many life companies, and I don't know a single one of them who would insure an 86 yr old woman with Alzheimers. Fourth, a cash surrender of a life policy is taxable income and will have to pay taxes on that amount.The bottom line is don't surrender the policy. Find other means to pay the nursing home until her Medicaid is approved.

9. justin bieber Says:
   February 8th, 2010 at 4:59 am

   If she's got alzheimers, her legal guardian can surrender the policy, HOWEVER, keep in mind that cash surrender value is likely way, way, WAY less than the death payout value. If the death benefit is $100,000, the cash value is likely around $15,000, maybe a little higher.

10. miley cyrus Says:
    February 8th, 2010 at 4:59 am

    if you don't have the money then you can apply for assistance for her through social services…wow I thought this was going to be a let's kill ma for her money post… lol thank you for being decent!

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