Hey /r/personalfiance, I really need your help. I have no idea if my mom is being scammed or not.
I read /r/personalfiance a lot and every time I see a thread about whole life insurance, everyone says it is a scam. I am wondering if this applies in this situation as well.
My mom is in the US, 58, disabled, and receives disability and is on food stamps. She has been in poor health in general. She has had uterine cancer and thyroid cancer. Over the last 5 years, my mom has had leukemia twice. We thought she was out of the clear about a year ago, but the doctors told us that it had returned. After, treatment again, they said they do not see any signs of the cancer right now.
Since she is on a fixed income and in poor health, and obviously does not have anything saved up, she is worried about funeral costs. I am not in a position to help her.
Well, an agent told her she could get whole life insurance which could help cover her funeral costs, but I have no idea if this is a good idea.
I will give the details to the best of my ability.
It says it is a whole life insurance with graded death benefits. Chronic Illness Accelerated Benefit Rider. Provides for the advance of the death benefit under the base contract if the insured is chronically ill. No rider charge. It also says Terminal Illness Accelerated Benefit Rider. Provides for 1 time payment in advance of the death benefit under the base contract if the insured is terminally ill with 24 months or less to live. The amount advanced will be carried as a lien against the future contract benefits. There is no charge for this rider. However, there is a 1 time charge up to $250 if you choose to activate this rider.
It says policy year 1- 20, annual premiums each year at 450, guaranteed cash value that starts at 0 the first year and looks like it increases close to 200 dollars a year and then stops at 3,400 dollars in the 20th year. It also says guaranteed death payment. First year and second year says 110% of premiums paid. Then after that it says 8,500 for every year after.
It says the loan interest is 8% fixed. Guaranteed interest rate 4.25%
It says it covers natural death or accidental death.
But it also says: We will not pay any benefit under this policy for accidental death if the insured’s death is caused or contributed to by disease or infirmity of mind or body, or medical or surgical treatment for such disease or infirmity. Which seems like an instant disqualifier to me, but they want to issue this policy to her.
I have no idea if this is a good idea and I have no idea how to explain to her if this is a good idea or bad idea.
Any help would be greatly appreciated.
Thank you
Submitted February 02, 2019 at 04:46PM by LonelyLog http://bit.ly/2UyLLTx
