"Cashing In"

i'd avoid taking phone calls for the time being !

As I said, it's complicated. Right now I'm just methodically taking my time... and considering what's next, if anything. It is definitely, a migraine producer.

that's a good idea !

don't rush and don't throw good money after bad money .

You probably know that you were likely not the beneficiary of the policy in the first place. When a parent takes out a policy on a child, they usually make themselves the beneficiary (since if you die you really can't use the money.) If your mom was the beneficiary and your sister transferred it to her name, all she did was make off with an asset that should have been in the estate. You don't mention your age and you probably don't know the face value of the policy, but I doubt it is worth a huge amount. This is not a great investment for your sister either. Some of what she pays (a pretty good chunk) goes to paying for the insurance, the rest towards the investment (cash value). Your best revenge could be to stay alive so that all her insurance contributions go to waste.

Let's make sure you understand the distinction between the beneficiary of a life policy and the owner of a life policy. The owner is the person who pays the premiums. The beneficiary is the person who gets the money once the person designated in the policy dies. The owner and the beneficiary can be the same person, but not necessarily.

It sounds like your mother was the owner of the policies that she took out on you and your siblings. It also sounds like she was the beneficiary. Now, here's the first problem: once she died, the policies, because they apparently were whole life and thus had a cash value, should have become part of her estate. In other words, those policies should have been distributed to her heirs according to the laws of intestate succession (since, as you mentioned, she didn't leave a will). The question then arises: how did your sister end up with the policies? Was that part of the estate that she inherited? Or did she just end up with them because nobody was really paying attention?

Second problem: your mother had what is called an "insurable interest" in the lives of her children. Having an "insurable interest" means that a person would suffer some kind of pecuniary loss in the event of the insured's death. A parent has a presumptive insurable interest in her children, just as a husband has a presumptive insurable interest in his wife (and vice versa). A mother, then, doesn't have to prove that she'll suffer a pecuniary loss on the death of one of her children, it's just assumed. A sibling, on the other hand, doesn't have a presumptive insurable interest in the life of another sibling. Your sister, in other words, would have to prove to the insurance company that she would suffer an actual financial loss on your death. Otherwise, the policy is a "gambling policy" and would be void as contrary to the public interest.

If your sister became the owner and beneficiary of those policies, I don't see why the insurance company issued (or converted) those policies in the first place. It shouldn't have issued a policy to a sister on the life of her brother unless she could show that she would suffer some kind of financial loss in the event of your death. That fact makes me suspect either that something is wrong with the policies (e.g. maybe a misrepresentation in the application) or else the policies no longer exist (i.e. that the insurance company paid off the cash value of the policies when it became aware of your mother's death, and your sister just took the money for herself).

But let's imagine that nothing is wrong with the policies, that your sister is legitimately the owner and beneficiary of them, and that they really do exist. Do you have the right to cash them in?

No.

As I understand it, you're just the insured. You're not the owner. Consequently, you have no rights in the policy. Only the owner can cash in a whole life policy. If that's your sister, then she has every right to refuse your request to cash in the policy and give you the money. Now, it's possible your mother wanted you to be able to cash in those policies and receive the cash value at some point. If that was her wish, then she should have written it out in a will. She didn't. That's too bad, but then that's your tough luck. Don't make the same mistake yourself -- make a will.

EDIT: I skipped over the entire second page of this discussion, so I missed the fact that Dadpad and engineer already addressed the estate aspect of this matter. My apologies to them. I didn't mean to step on your toes.

Good advice, Joe. It's nice having a real attorney around.

It would be interesting to hear the sister's point of view, but of course that isn't likely. As I see it, both the poster and his sister are looking for a payoff and are perfectly willing to alienate the other to get it. Yet another case of family relationships being ripped apart over money. Happens all the time, and it's always sad.

Joefromchicago because of the insurable interest question alone I think that at the very least he had a right to get some details about an insurance policy that insured or did insured his life.

At a guess his sister somehow cash it in long ago but who know.

Amen.

JoefromChicago said: Let's make sure you understand the distinction between the beneficiary of a life policy and the owner of a life policy. The owner is the person who pays the premiums. The beneficiary is the person who gets the money once the person designated in the policy dies. The owner and the beneficiary can be the same person, but not necessarily.

Thank you very much Joe for that information. I think I fully understand the definition of the word beneficiary as it relates to insurances and whom that might be. Moreover, I also fully comprehend the terms- policyholder/owner. In my case, my mother was the original beneficiary and owner of the policy. Upon her death, my sister elected to obtain the policies by assuming the obligation of paying the premiums herself. This act has directly allocated her as our beneficiary. I understand that I am the insured, thereby, incapable of being the beneficiary, too. I got that, okay? Furthermore, keep in mind, 12 years ago following our mother's death, I requested to begin paying the premiums where mother stopped. That request was rebuffed by my sister. I recall her saying something like... "I don't mind paying the premium for you, you don't have to be worried about that, too" (meaning in addition to mother passing).

Want to add some more confusion to the whole ugly mess? Here we go, believe or not, she years ago, gave approval to my younger brother to cash-in his insurance policy at its then, cash value. Once again, I was not privy to such an arrangement, and why wasn't I extended the same ability? It isn't greed that motivates me to want to settle this...this chaos, as some has alledged. The more and more I look into it, I'm finding disingenuousness on the part of my sister and an out-right misrepresentation of, what I believe, would have been our mother's intent. And to think she was able to craft this entire plan of hers, at a time when everyone who truly knew my mother, were feeling the immense void of her passing. That's why I said, 'I don't know this person I called sister'.

That seems to be a scenario worth following up.

A sixpack says sis cashed the policy.

It all sounds very tawdry, as interfamilial disputes over money always are. Something is fishy here -- your sister might even be defrauding the insurance company, for all we know. But be aware that, as the insured, you don't have many rights with regard to an insurance policy on your life. From the insurance company's perspective, you're of actuarial interest to it and not much else. You are well advised to contact a lawyer to look into the questions arising from the handling of your mother's estate, but I doubt that there's a whole lot that a lawyer can do to help you get your hands on the policy otherwise.

Wow.. that seems a bit harsh in your judgement.

You claim your mother managed to always make the payment with great effort. That would imply your mother thought a lot about those policies. I would suggest it is far more likely that your sister is assigning sentimental value to the policies that far exceeds any financial benefit from them. Your mother thought they were important so now your sister feels she needs to maintain them in memory of your mother.

do you want the money that the policy may hold?

ehBeth, I want to know what became of the original policy my mother sought so very hard to maintain for so many years on her own. That's what I want. Moreover, if it is determined through my invetigation, that she obtained the policy by way of chicanery means, then, I will IMMEDIATELY demand a cashing in of the policy. Why?! Because I would not want HER to benefit at all from my passing. And if there is some monetary gain resulting in my decision, then so be it. First and farmost, however, the eradication of her name from the policy with be paramount.

UPDATE: I have through some difficult research, been able to pen-point where the policy now exist and the current carrier. It seems the insurance company that my mother originally purchased the policy with, is now defunct; that is to say, the local branch is. The administrative functions of the local branch was moved to their headquarters sometime ago. Somehow, she (my sister) obtained a policy with another major insurance company and, THIS IS IMPORTANT, I am listed as its owner. Case CLOSED!

This is all information she could have provided me with herself, she chose not to. This is someone, who will not provide me with ANY assistance at all with ANY of life's circumstances IF, there is a dollar amount associated. Yet, she felt compelled to pay, for years, an expense amount in the preparation for my exit from this world. Ladies and gentlemen, that is disturbing for any RATIONAL thinking person.

Did the insurance company let you know if you could cash it in at this time?

Cycloptichorn

Cycloptichorn: Did the insurance company let you know if you could cash it in at this time? Yes. The papers are on their way.

I'm glad this worked out well for you. Unlike others here I don't think you're doing anything wrong. I think it's creepy the behavior your sis was displaying.

Cycloptichorn

I'm glad this worked out well for you. Unlike others here I don't think you're doing anything wrong. I think it's creepy the behavior your sis was displaying.

Thank you, I wholly agree with you.

YOU are listed as the policy owner? Hmmm.

My parents had policies on myself and my siblings that we assumed when we were grown and financially able. They took out the policies expressly to cover funeral and burial expenses should we die.

Do you have other life insurance? (Did I miss that?) Who would be responsible for paying your funeral/burial/cremation costs if you die? If your sister thought she would be expected to pay for this as your next of kin, I could see why she'd pay the premiums and wouldn't want you to cash it in. But if she would not be responsible...well, that is creepy...and weird.