OT Metlife

A number of years ago my parents purchased a life insurance policy for me. The guy that sold the policy told them it was paid up and I would never have to pay on it. What he didn't say was he thought the amount they deposited the interest would pay the premiums and since the economy has gone south and interest rates are down the premiums has eaten up their initial deposit. I understand that part. What I don't understand is how they can increase the premiums about a penny every month. This has gone on so long the premiums are about $5.00 a month more than when it started. Now rather than let the policy go away I sent them a deposit a little more that what a years premiums to keep the policy in effect and they charged me a $18.00 service fee for the transaction. Is this crooked or what.

Metlife has been caught doing things from time to time. I have a policey paid for life plus a little stock with them due to a class action against them for a policey I had in the late 80's.

Rick

Stephen---I don"t think it is crooked....more of a misunderstanding of how this policy was designed....

My best guess, from the info you provided, is you own a type of "universal life" insurance..

Premiums that are owed, deposited, etc. are "credited" with what they refer to as "a current interest rate assumption"...

When your parents purchased the policy, the interest rate was much, much higher than what it "currently" is today. When the policy was purchased, I bet the amount that was put in as a premium payment (paid) was sufficient to support the policy costs......based on the "current interest rate"...

Now that interest rates have plummeted, the policy is hungry for premium money. If you don"t feed it, the policy will lapse.

This type of policy has a "cost of insurance" built into it, and is based on the current age of the insured.....as you get older, this "cost" increases....that is why you see the "premium---cost of insurance" continuing to go up...

This type of policy is flexible enough that you should be able to call the Company, ask them what the "Minimum Level Premium" is to support and gaurantee the insurance for whatever amount of years you feel you need to keep it.

This set up pays for all the basic internal costs of ownership, gaurantees the coverage, and doesn"t keep you guessing what the premium will be.

The $18 service fee seems high...but might include other fees like "catch up premiums, etc.

The more the insurance co. needs to handle the premium (monthly, quarterly, annually) the higher the service fee.

Confusing---eh?

For some folks, this type of policy is used as a retirement vehicle....if so, they better understand how it works....

Good Luck-HTH

Tim

Dump that life insurance policy unless you have health issues that make getting a new policy impossible. Every one of these policies I have ever heard of always run out of money. The premiums and fees eat up any earnings. The insurance company controls the earnings and fees. So do you really think that they are going to leave you any money??? Whole life insurance is always a rip off. You can buy straight term insurance for half as much money. Plus the fees on term life are much lower as well. Then just take the premium saving and invest it.

Remember that your agent in NOT your friend in this. He gets a cut out of each premium you pay. An the percentage is higher for whole life and repaid policies. Most agents retire with income for years from these life insurance policies.

I have a GOD daughter that is an agent. She got fired from a company for not selling enough life insurance. She sold half of the auto insurance they sold but the owner wanted MORE life insurance sold because he was just a few years away from retiring.

She now has her own agency and has taken about all of the old agent's business. He now has money issues. What you seed in life come back to you.

Agree with JDSeller for the most part. Dumped all my whole life that parents etc had for me as I got older.

I carry a term life policy, much cheaper than a whole life. Covers all the expenses and takes care of my kids in case something happens to me.

Works for me.

Rick

I carried 3 whole life policies. I had a good one with New York Life that I started back in the 70's that had a pretty good cash value to it. When the stock market was going crazy, I decided to cash it in and invest the money in the stock market. You all know what happened there. I had another with Prudential that I was also going to cash in but they advised me to hang onto it since they were going to go public and I would be getting some shares of stock. I ended up with 100 shares that were valued at $30 a share. At one time they were over $100 but I haven't checked lately what they are doing. I just looked at the interest earned on the dividends I got from the policy and it pays over 3% which more than pays for my annual premium. The 3rd one is a paid up policy that pays dividends every year and interest on them also. My term ones eventually will run out. I get more coverage for less money but if I life to an old age, there will be nothing there where as the whole life ones will always be worth something.

I forgot where I read it, here or trator tales, but soneone's parents, in ill health, forgot to make payments, the policy expired, soon after so did the 'once' insured. This might be the worst 5 bucks you ever didn't spend. What is that? 5 quarts of gas? And if you kick the bucket, it will make things alot easier on your family. Met life is bigger than the economy of most countries. When that goes belly up, life insurance will be a thing of the past, and the least of our problems.

Both of those companies have had there hands slaped for takeing the money out of the policys. If you check it out you will find it is called churning and illegal. I wouldn't trust either of them.

My wife and had old paid up policies with them that were converted to stock.I cashed mine but wife held on.Metlife sends her checks for 2 cents.She has problems with the IRS because she forgot to report these giant earnings one year.Get rid of Met Life.

Yup, it's easy to look at the "value" of a whole life policy. But then compare what you put into it versus what you would have if you had bought term and invested the difference.

Not life insurance, but rather auto insurance with Metlife. Years ago when I lived in Illinois I used to go through an insurance broker, Insure One. My truck insurance through them was with Prudential. I don't recall how much a six month premium of full coverage was, but was more than $200 but less than $300. After years of service through them, no accidents, violations, or claims, I had clean record, all of a sudden I started getting bills in the mail for truck insurance from Metlife for over double the amount. Metlife? Metlife? Hmm, threw them in the trash a couple of times. Finally about third time I called them, "Who, what, why?". They told me that I was now insured with them, and owed them...over double the amount as was paying. I called Insure One, "Who, what, why". They told me that Prudential went out of business, switched me to Metlife, over double the cost. I looked through old premiums, got number for Prudential, called, they answered and said "Nope, not out of business, far from it". I called Insure One, told them Prudential told me "Not out of business, far from it", somebody is lying. Then they fessed up, moved me into high risk with Metlife to subsidize other high risk customers even though I had a clean record. I can't repeat here what I told them. But, they told me that I needed to call Metlife and tell them I was cancelling my insurance with them. Cancel with Metlife? I didn't hire them, but I called them. They told me that I needed to put in writing to them that I was cancelling them, or else they would cancel me and make me high risk for no other reason than on the official record, I would be shown as a cancelled policy holder. I can't repeat here what I told them.

I went to a State Farm agent, have been with on everything. House, trucks, Jeep, cycles, everything. No more insurance brokers or Metlife in this life ever again.

Mark

Agree. 100%. Whole life must have some of the lowest investment returns I have ever seen. Makes a normal annuity look attractive.