Life insurance policy taken out without knowledge...need advice!!

[Belle Amy]

My husband, 31, recently found out that his 97 year old grandmother took out a life insurance policy on him without his knowledge 12 years ago. He was 19 at the time the policy was issued, living on his own in another county, not being claimed as a dependent by ANYONE, let alone his grandmother.

She is an extremely trusting person and we know she meant no harm by taking the policy out. The insurance agent just wanted to make a sale, advising that he had taken a policy out on his own grandchildren. His grandmother has been making the payments on a limited budget for the entire life of the policy, and only advised us of it because the premiums have increased since DH turned 30 last year. She made a few payments at the new rate, $75 a quarter, before deciding that it was too much. This is when she informed us that the policy even existed. The previous payments were only 18 dollars a quarter, but she has been paying on this for 12 years, so it is a substantial chunk of money.

We reviewed the policy, in which his grandmother forged my husbands signature and used her own address as his, although he has never resided at her home.

Do we have any recourse with the insurance company? It seems this is a sleazy insurance agent taking advantage of an elderly woman. She was 85 years old at the time the policy was taken out. The policy is taken out as though my husband took it out himself, with his grandparents as the beneficiaries.

I've researched online and found that the person that forged the signature on the policy, in this case his grandmother, could be subject to insurance fraud. Clearly, we don't want that to happen. We have contacted the company that the policy is through, they advised that it is illegal for someone to take out a policy on someone without their consent or knowledge, but they have only asked that we cancel the policy and surrender any paperwork. We spoke with the agent that sold the policy and he claims that he has done the same thing with his own grandchildren and he has no responsibilty in the matter.

We've received the paperwork to cancel the policy but we want to be sure that we've done all we can. Frankly the entire policy is fraudulent and we'd like to get his grandmother's money back for her. That being said, we don't want her to be involved in any fraud charges, so if we've exhausted all options, we'll surrender the policy and call it a day.

Any suggestions or similar situations??

Thanks!

 

[kittychatalot]

Pleas econsult an attorney first. What your hubby's grandmother did is illegal, and she would probably be the one to face charges. The agent did nothing wrong unless he told her to sign his name. Good luck!

 

[golfgal]

Pleas econsult an attorney first. What your hubby's grandmother did is illegal, and she would probably be the one to face charges. The agent did nothing wrong unless he told her to sign his name. Good luck!

Actually both your Grandmother and the agent could be in HUGE trouble. Having the actual policy is not a big deal. Check into what KIND of a policy it is and with whom. If it is a term policy just cancel the policy, if it is some kind of a permanent policy (whole life or universal life) there is some kind of a cash value to the policy and you can get that money back from the company and either roll it into your own permanent policy or give it to Grandma to make up for the premiums paid in. My guess is that your Grandma didn't know what she was doing was illegal and probably WON'T face any repercussions but if that agent is still in business and preying on elderly people, he should be brought up on charges.

 

[DawnCt1]

It hasn't been unusual in the past for parents or guardians to take out life insurance policies on minors or young adults after they have been sold the concept that it is a "savings plan". Before you cancel it, find out what the value of it is. It may have some worth that you could be giving up.

 

[Golf4food]

First, you definitely need to contact an insurance attorney.

Second, if you find that the agent acted in an unethical manner you should report it to the state department of insurance, insurance commissioner, office of insurance regulation, etc. (whatever they call it in your state) - and to the company they represent.

 

[golfgal]

It hasn't been unusual in the past for parents or guardians to take out life insurance policies on minors or young adults after they have been sold the concept that it is a "savings plan". Before you cancel it, find out what the value of it is. It may have some worth that you could be giving up.

There are very good reasons to take out life insurance on minor children, this is not the same situation. If a child is over 15 they generally have to sign any life insurance application that they know the policy is being taken out on them-the agent side stepped this by having Grandma forge his signature.

 

[Wishing on a star]

Yes, consult legal counsel.
They probably would have advised against speaking directly with the insurance company and telling them that your grandmother may have been the one to forge that signature. Too late to take that back now....

I imagine that this kind of thing is legislated by the States... So, you need to know exactly what the situation is, according to state law.

I suspect that since your Grandmother is the one cancelling the policy, and that no claim or payout/loan against benefits was ever paid. Then your grandmother has not received one penny. I wonder if there is language legaleze in your state that would say "illegal to take out a policy, or to forge a signature, with the intent to defraud (falsely benefit from) the insurance company"?

If the law has language regarding 'intent', then it would have to be proven that your grandmother actually took money from, or intended to take money money from, this policy. Her cancellation immediately would disprove any 'intent'.

Many of these policies are very dubiously presented like savings... you pay premiums / make deposits, and sometimes money can be paid out kind of like a loan against future benefits.

It is definitely confusing, and I don't see how a confused 85 year old woman would ever be prosecuted...

Unfortunately, she is probably out any cash value that this may have accrued.

She was definitely the victim of fraud as an elderly target....

 

[DizBelle]

There are very good reasons to take out life insurance on minor children, this is not the same situation. If a child is over 15 they generally have to sign any life insurance application that they know the policy is being taken out on them-the agent side stepped this by having Grandma forge his signature.

How can you be sure the agent had her sign your DH's name? Did she not know what a signature on a document meant and signing someone elses name was wrong? Just because she was 85 at the time doesn't mean she didn't know exactly what she ws doing.

I would cash it in for whatever it is worth and move on.

 

[golfgal]

How can you be sure the agent had her sign your DH's name? Did she not know what a signature on a document meant and signing someone elses name was wrong? Just because she was 85 at the time doesn't mean she didn't know exactly what she ws doing.

I would cash it in for whatever it is worth and move on.

The AGENT knew it was wrong and that is enough.

 

[scrapquitler]

I think that it is only illegal to take out a policy on another person IF you intend to do it for fraud. My Dad had a policy that he took out on my Grandma that she didn't know about...he did it because he wanted to be sure that he had money to pay for her funeral. No fraud there, and there is nothing illegal.

My parents also had a policy on my brother until he got married when he was in his late 20s. He lived with them, and my parents had that policy so that they could pay for a funeral for him if something terrible happened.

Just because Grandma had a policy on the grandson when he was 19-31 years old doens't necessarily mean that it was fraud. YES her signing his name IS fraud, and if the OP presses this issue, grandma is the one who will be in trouble.

 

[wdwfan16]

The AGENT knew it was wrong and that is enough.

How do you know this?

I would just cancel the policy and do nothing else.

 

[DizBelle]

The AGENT knew it was wrong and that is enough.

How do we know what the agent knew or did not know?

Also, what was Grandma signing on behalf of the grandson? The agreement was between Grandma and the insurance company. Those are the only two parties that had to sign to agree on anything.

The only thing I can think of was that the grandson's signature was his statement of his health which they might want to know before insuring his life.

I think I could take out a life insurance policy on Donald Trump if I wanted without his knowing. It's an agreement between me and the insurance company. I pay the premiums and the insurance company pays out when Don dies. If the insurance company doesn't require anything from Donald (statement of health), he need never know.

 

[DizBelle]

Why is it assumed that 85 year olds don't have a clue?

 

[golfgal]

I think that it is only illegal to take out a policy on another person IF you intend to do it for fraud. My Dad had a policy that he took out on my Grandma that she didn't know about...he did it because he wanted to be sure that he had money to pay for her funeral. No fraud there, and there is nothing illegal.

My parents also had a policy on my brother until he got married when he was in his late 20s. He lived with them, and my parents had that policy so that they could pay for a funeral for him if something terrible happened.

Just because Grandma had a policy on the grandson when he was 19-31 years old doens't necessarily mean that it was fraud. YES her signing his name IS fraud, and if the OP presses this issue, grandma is the one who will be in trouble.

It is VERY much illegal to take out an insurance policy on anyone over 18 without their consent. That is a FEDERAL insurance law-illegal in every state. There would be nothing wrong with your Dad taking out a life insurance policy on his mom to cover her funeral costs but she would have had to sign something stating that it was ok. If it was legal people would be taking life insurance policies out on everyone and then knocking them off and collecting the payout.

 

[DizBelle]

It is VERY much illegal to take out an insurance policy on anyone over 18 without their consent. That is a FEDERAL insurance law-illegal in every state. There would be nothing wrong with your Dad taking out a life insurance policy on his mom to cover her funeral costs but she would have had to sign something stating that it was ok. If it was legal people would be taking life insurance policies out on everyone and then knocking them off and collecting the payout.

The "knocking off" part is already illegal. So, why does the insurance policy part have to be illegal?

 

[Belle Amy]

We have no intention of pursuing anything if it would mean DH's grandmother being investigated for fraud. Although she was entirely in her right mind when the policy was innacted, she is a very innocent and trustworthy woman. All it took was the insurance agent telling her he had done the same thing with his grandchildren and she didn't have think anything of it. She is rarely suspicious and in fact discusses with us frequently of phone calls she receives from people for money, in which she considers sending funds to someone she only spoke with over the phone. It isn't that she isn't a very intelligent woman, she just has faith that people will do no harm. We have to explain that intentions are not always genuine.

As for the policy, it is worded as though DH took the policy out, hence the false signature by his grandmother. She signed his name as though he was agreeing to the terms of the policy. As he was of age, not living in her household, and comletely unaware of the policy, I know that it is illegal and the agent should be ashamed for taking advantage of DH's grandmother, but I agree that she should also have understood that it was a contract in which she was forging a signature and that is also illegal.

I think we will just cancel, take any payout they offer and give it to his grandmother, and move on. We don't want to risk an insurance investigation on his grandmothers part.

As a side note, once we called the insurance company and requested the paperwork for cancellation, we received a bill for the next premium payment to our home address. Really?? We ask to cancel because of an illegal policy, and you send us a bill??

Thanks everyone for your thoughts!

 

[bumbershoot]

Why is it assumed that 85 year olds don't have a clue?

Because some don't.

Don't get me wrong...we live in a condo building that is mainly extremely retired people, and they are all very very smart and with the times. Most have computers (though more of them need to learn to lock their wireless networks) and they are very mentally and physically active.


However, my MIL is clueless. She, along with our shared landlady (our landlady, MIL's apartment complex manager), filled out a life insurance application that flat out LIED about MIL's health, and neither of them thought they were doing something wrong. MIL didn't think they needed to know about her diabetes or heart attacks, and landlady/manager didn't push the issue (even though she KNOWS about those things b/c we've all told her), despite the very VERY specific questions about those very things on the application.

Thank goodness MIL had us look over the insurance info when it came, b/c we were able to stop it before any policy was enacted...she just wants a small policy so each of her 3 adult kids can get a little when she dies, but if she'd died of either of those problems, all of her premiums would have gone to nothing.

Landlady/manager read the questions, MIL answered incorrectly, l/m wrote it down knowing it wasn't true...and neither of them thought they'd done ANYTHING wrong.



OP good luck.

 

[Wishing on a star]

Why is it assumed that 85 year olds don't have a clue?

First of all, this kind of insurance stuff is VERY confusing, and it is well known that these agents will use this to their advantage (even outright lying) just to sell a policy to anyone at any age who seems gullible. Who does have a clue to this indecipherable stuff?

Second of all... The OP herself stated
"Do we have any recourse with the insurance company? It seems this is a sleazy insurance agent taking advantage of an elderly woman. She was 85 years old at the time"


OP, please seek legal advice.... If your grandmother receives any money from, or benefits in any way from, a policy to which it has already been established that she forged a signature, this will certainly implicate her of a possible crime.

The easiest out here is to simply cancel.

 

[golfgal]

How do you know this?

I would just cancel the policy and do nothing else.

Because it is one of the first things he would have learned to get his insurance license. If he DIDN'T know that then he had no business being IN the business of selling insurance.

The "knocking off" part is already illegal. So, why does the insurance policy part have to be illegal?

To remove the temptation to do just this. If you can't take out an insurance policy on just anyone there is no motivation to try to collect on an insurance policy. There are people that would be able to kill someone off and not get caught. Look it up if you don't believe me, it is illegal to take out an insurance policy without someone's knowledge, period.

 

[golfgal]

We have no intention of pursuing anything if it would mean DH's grandmother being investigated for fraud. Although she was entirely in her right mind when the policy was innacted, she is a very innocent and trustworthy woman. All it took was the insurance agent telling her he had done the same thing with his grandchildren and she didn't have think anything of it. She is rarely suspicious and in fact discusses with us frequently of phone calls she receives from people for money, in which she considers sending funds to someone she only spoke with over the phone. It isn't that she isn't a very intelligent woman, she just has faith that people will do no harm. We have to explain that intentions are not always genuine.

As for the policy, it is worded as though DH took the policy out, hence the false signature by his grandmother. She signed his name as though he was agreeing to the terms of the policy. As he was of age, not living in her household, and comletely unaware of the policy, I know that it is illegal and the agent should be ashamed for taking advantage of DH's grandmother, but I agree that she should also have understood that it was a contract in which she was forging a signature and that is also illegal.

I think we will just cancel, take any payout they offer and give it to his grandmother, and move on. We don't want to risk an insurance investigation on his grandmothers part.

As a side note, once we called the insurance company and requested the paperwork for cancellation, we received a bill for the next premium payment to our home address. Really?? We ask to cancel because of an illegal policy, and you send us a bill??

Thanks everyone for your thoughts!

I would advise you to talk to your CPA and/or financial planner before you do anything with this policy. First, you can't cancel it if you don't own the policy, his Grandmother would have to do that. Second, if you cash in the policy and there is a cash value to the policy you could be subjecting his Grandmother to some major taxes. If the policy pays out to you (if for some reason your DH actually "owns" the policy) and you give the money to Grandma and it is over the gift limit YOU could incur some major taxes. Keep in mind that just because your DH is the insured he may not be the owner of the policy and only the owner can make any changes to the policy.