My mother died a couple of years ago. We’d not been in touch at all this century, and I had not even known for sure if she was alive or dead until someone notified me of her death. That was in 2015. Today I received a letter from Banner Life Insurance Co, the US subsidiary (in Maryland) of London-based Legal & General Group Plc.
The letter states I am entitled to $1004.50 from a life-insurance policy my mother held. It also says: “Please be advised that the above policy has an outstanding loan. The details of the loan amount will be reflected at the time of claim distribution.”
I’ve never heard of these companies, but looking them up I see they are legitimate. The letter includes forms for me to sign and have notarized, asking for my Social Security number but nothing more personal than that – no bank-account details or such. I tried calling them in case they have a late-night hotline, but as expected they close at 5pm Eastern time. (Hawaii time time is six hours behind Eastern time this time of year.)
My main concern is the part above regarding an “outstanding loan.” Could I be held responsible for any loan she still has outstanding? Assuming this is legitimate of course. I thought I would run this by the Board before I tried calling them again or signing the paperwork.
EDIT: Just to add, the company knows my present address here in Waikiki, as this is where it was sent. It did not follow me around the world. I’ve had this apartment only since last September.
The loan could refer to unpaid insurance premiums which interest is charged on, I would call them up and ask for the “surrender value”, once the surrender value is zero they would simply cancel the policy rather than considering it a debt.
I would not give them your social security number without knowing a great deal more. We forget sometimes that not all scams are limited to the Internet. Proceed with all due caution.
ETA: Sometimes you can find consumer or fraud warnings about companies online. You might try looking for reviews, complaints, and so on, before you decide whether you want to contact them.
The letter must have a policy number or identifier on it. It may have contact information in it.
Do not rely on the contact information in the letter. Look up contact information independently, such as online. And proceed cautiously in this, as well, as scammers sometimes poison search engine results so that their scam version of a target company’s website comes up earlier in the search results than the legitimate website.
And the policy identifier is key. If the letter doesn’t have one, the letter is garbage, because the policy number is the critical data item identifying the policy. If the letter does have it, this is the piece of information you use to verify the “goodness” of the prospective transaction at the contact you have looked up independently. If it’s a garbage or made-up policy number, it won’t work and you’ll know the letter is a scam. Otherwise, it is the key that unlocks the rest of the transaction, which allows you to get to the point of making a claim and settling the loan.
I think this is the most likely situation. Insurance companies will let you take out loans against your payout, but won’t loan you more than your payout.
Yeah, just like you can borrow from your 401k up to the amount to pay off the loan. The letter is probably legit.
I got a similar letter about a year after my sister died, from a credit union I had never heard of. Of course I wasn’t familiar with her financial dealings and wasn’t her executor, but I was apparently her beneficiary on this account.
I thought that I would go to the trouble of getting another certified death certificate and send it in, and get a check for the remaining $5 in her account. But no, $1100! Thanks sis.
Thanks for all the advice. Yes, the letter contained a policy number as well as a claim number. I called the company this morning using not the number in the letter but one I found on their website online. The letter is legitimate, and I was even transferred to the lady who sent it to me. They had been looking for me for a while and eventually found my current address in public records.
The outstanding loan mentioned has a remaining balance of $125.50, and that will be subtracted from the $1004.50. There will be a little interest paid, bringing the total paid to me about $900. So a nice little surprise.
No, not unless you co-signed the loan. Her estate could be responsible for any outstanding debts but you can’t, personally, be held responsible for it any more than if I put you as the contact party on a loan that I took out.
There’s (more than?) one insurance company that runs TV commercials where someone has died & “it’s good they had a policy to cover funeral expenses & credit card debt”. Ummm, no, if the estate has no funds, the (bank that issued the) credit card is an unsecured creditor & eats the loss. They may try & pass it onto an heir but there’s no legal obligation for the heir to take it & they are a dumbass if they do. Again, assuming the heir isn’t on it as a joint account/co-signor.
Although I’m sure there exist scams that involve looking up people who have died in past years and mailing physical letters to their descendants with forms that they will write their SSNs on and mail back, that has to be a pretty inefficient way to harvest suckers.
While it wouldn’t be sound advice to buy an insurance policy based on a day time television commercial, the grain of truth there is that small insurance policies designed specifically to offset funeral costs and such prevent the estate from possibly having to liquidate assets that the heirs may have otherwise wanted to keep intact. Of course, those same heirs could pay for the expenses out of pocket so as to avoid liquidating those previous assets…
So I won’t be taxed on the $900 I’ll eventually get? Sweet.
Still trying to get that one form notarized. The UPS store nearby will do it for $20 the moment I walk in, but my banks will do it for $5, so screw UPS. However, you have to make an appointment to get something notarized. Why so complicated? So I have an appointment for tomorrow morning, then I’ll mail the forms back.
The point I was trying to make is that a large, well-known insurance company is trying to sell insurance based on inaccurate information in their commercial in regards to the CC component. Yes, I understand how sales & marketing work, but IMHO, selling your product on BS info is sleezy & while I might expect this from an individual salesperson, I don’t from a produced commercial, which requires more thought & approval.
You will get taxed on the interest that you mentioned a few posts back. You said your mother died a few years ago - whatever interest the payout has accrued in that time is taxable to you, since theoretically the payout money was “yours” as soon as they were notified.
Sure, but if there’s a house, then the CC company can foreclose on it to get paid off, and the house won’t pass to the kid who’s been living there with Mom for the last ten years. It can be essentially a form of disruption insurance.
