by KYW's Salil Gutt
Many seniors are unable to understand the annual statements they receive on life insurance policies they have owned and paid into sometimes for decades. In some cases they will be dramatically shortchanged by the insurance company.
A social worker at a retirement community provided this example which may be more prevalent than we think. A resident showed her the statement from the insurance company which indicated that the cash value of his policy was greater than the death benefit to be paid. The company said nothing but kept billing him for more premiums. In such a case it is a no-brainer to surrender the policy for its cash value. Yes taxes are due but most seniors are in a very low tax bracket because of the medical deductions.
Even after taxes the proceeds of the policy would be greater than than the death benefit.
What was shameful is the customer service rep resisting the lump sum payout and trying to convince an 85-year-old man on less desirable options.
The message here is for you to check up on the life insurance policies of your elderly relatives.
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