Life insurance cancellation process - is this standard?

[Kitsune]

hey everyone. Quick question about life insurance cancellation...

I had a whole life insurance policy, got a few years ago, that, after reviewing, we have decided to cancel (we have more savings than the pay-out is worth, and the monthly bill is a drag: basically, I'd rather invest that money than pay 50$/month for a 50k life insurance policy).

My husband and I both got sizeable term policies a year ago, at the birth of our daughter. Term because, realistically, we need to be sure that we can pay for our house and raise our kids, but we do have enough savings that anything after that can be supported by the savings we have... And honestly, 50k wouldn't make a difference at that point.

So. We requested a cancellation of plan #1. Without speaking to an advisor, because we have evaluated our needs and what we're willing to pay for (snark: like grown-ass adults who have control of their own damned finances, kthx). And so I reached out to the dude who sold me the whole life insurance years ago (and which has a cancellation policy, so I CAN cancel it), and filled out the paperwork he requested to cancel it and get back the current value of the plan. Up until that point, pretty much what I expected, right.

And now the dude is demanding paperwork filled out by "our new advisor" (aka: I'm assuming the guy who helped us with the term life insurance, who we haven't spoken to in a year, who didn't push this decision...) to "support the decision for this cancellation".

Anyone who has experience with life insurance: wtf? Is this standard?? Is this something he can actually demand before paying out the plan value, or is he just jerking us around?

'Cause I don't think my family's financial decisions need support from a third party. Also, F that. (Like, I can get the guy we worked with to fill out papers if actually needed, but I'm steaming at the thought that it's required.)

*steam*

[dandarc]

Maybe contact the company directly?  I found working directly with Met-Life and American Funds, both of whom we are in the process of leaving, much better than working with the adviser.

My adviser basically told us to just stop paying the Met-Life policy to cancel it.  It was term, so no concerns over the cash value though.  Hope that doesn't come back to bite us in the ass down the road, because that's what we did.

[MDM]

Wasn't required when I helped my mom cancel a couple of whole life policies she had.  Appears he is trying to erect roadblocks in the hope you will reconsider...?

Instead of him demanding paperwork from you, it's time for you to demand the return of your money from him.  Good luck!

[velocistar237]

Sounds like some kind of hard sell. Just send him a note, tell him thanks for his concern, but you've filed the cancellation paperwork and expect it to be cancelled effective immediately and processed in a reasonable time frame.

[Blonde Lawyer]

I haven't experienced what you a describing but I'm trying to think of a legal analysis here.  An adviser owes you a fiduciary duty to best advise you on how to manage your money.  If he thinks this decision is not in your best interest, he should just put that advise in writing, you sign that you are so advised and then you get your money.  He could be alternatively doing a CYA by papering his file that you are now being advised by another adviser and he is off the hook.  My gut says though, this is a retention policy.  Just like you can't quit your cell phone plan without talking to 10 people that try to convince you to stay.

[Fi(re) on the Farm]

The advisor is bs'ing you. Contact the company and see if your policy has been canceled and if they are sending you a check for the cash value. If they give you a hard time contact your state's insurance dept.

[AH013]

Ditto to an unnecessary road block to see if you'll reconsider.  What you probably don't realize is you basically just told him he losing a $5/month meal ticket (10% commission for whole life policies to the adviser) for life, and so is his office (10% to the agency too).

Don't take it personally -- it's also a bit of CYA, as there are asshats who'll sue former advisers because the client wants to empty the account to buy into a ponzi "guaranteed 20% returns" scheme and then they blame everyone but themselves for being a sucker...and courts actually entertain that bs.

I'd echo velocistar's advice, tell him you are managing your own financial affairs, so whatever form was sent for the second adviser to fill out is not applicable and you expect your policy to be cancelled per your original submission.

[Kitsune]

Thanks for the feedback, everyone! I was pretty sure he was full of it, but the confirmation was nice.

I told him that my decision was made without consulting a third party, and that I hadn't spoken to anyone else about insurance in the past year, and that as such he shouldn't need anything from anyone but me regarding my decisions about my money, and who did I need to speak to to make that happen. (Spoiler: he backed down.)

And I could have understood a concern if he was actually my financial ADVISOR; I haven't spoken to him in 7 years, and he has no idea what my current life style is (aka: I've acquired a husband and a child since last speaking with him...). So... yeah. He has no clue. I'll chalk that up to "immensely frustrating retention policy" and get on with things.

(And note: I can understand why they would usually like the option to compare what you're offered elsewhere and make sure that they can offer something equal/better, and/or insure that you're not cancelling for something that doesn't offer the same coverage. In this case, though, I KNOW I'm cancelling for something that doesn't offer the same coverage. I'm cancelling for something that offers the coverage I ACTUALLY NEED, which I ALREADY HAVE. Get. On. With. It. Argh.)

[begood]

Remember that you will have to pay tax (regular tax rate, not cap gains rate) on any gain in cash value ABOVE the total of the premiums you paid. If it's only a few years old, you may not have to worry about that, but it's something to keep in mind.

[Blonde Lawyer]

I'm trying to figure out why my spellchecker changed advisor to adviser and recognizes the latter as a word but not the former. I had previously only seen advisor before so I just googled it and apparently adviser is the officially preferred spelling.  How random.  Any other grammar geeks like me get fascinated at this stuff?

http://grammarist.com/spelling/adviser-advisor/

PS: not calling out anyone here.  Like I said, I wrote advisor and it got corrected by my browser.

[AH013]

I'm trying to figure out why my spellchecker changed advisor to adviser and recognizes the latter as a word but not the former. I had previously only seen advisor before so I just googled it and apparently adviser is the officially preferred spelling.  How random.  Any other grammar geeks like me get fascinated at this stuff?

http://grammarist.com/spelling/adviser-advisor/

PS: not calling out anyone here.  Like I said, I wrote advisor and it got corrected by my browser.

Funny point of legality from someone who was in the insurance industry, something I learned first week on the job of an insuraNce firm I Won't naMe.  Apparently politicians got a law on the books that if you call yourself an "Adviser", you actually have a fiduciary duty to advise and act in the best interests of your clients, not in the interest of yourself or your firm, and can get in trouble for pitching junk to earn a commission without regard for whether it's best for the client.

That's why there are so many great Advisors in the insurance industry. ;)

[JoJo]

There's a kernel of truth behind this.

If you are Replacing one policy with another, there is legal requirements for the replacing company to make sure it's in your best interest to trade one for the other (google "Life Insurance Replacement regulations") to make sure the agent isn't churning business but giving you a bad replacement product and subjecting you to new surrender charges.

But that's not up for the canceling company to handle, so I smell BS too.

[Blonde Lawyer]

I'm trying to figure out why my spellchecker changed advisor to adviser and recognizes the latter as a word but not the former. I had previously only seen advisor before so I just googled it and apparently adviser is the officially preferred spelling.  How random.  Any other grammar geeks like me get fascinated at this stuff?

http://grammarist.com/spelling/adviser-advisor/

PS: not calling out anyone here.  Like I said, I wrote advisor and it got corrected by my browser.

Funny point of legality from someone who was in the insurance industry, something I learned first week on the job of an insuraNce firm I Won't naMe.  Apparently politicians got a law on the books that if you call yourself an "Adviser", you actually have a fiduciary duty to advise and act in the best interests of your clients, not in the interest of yourself or your firm, and can get in trouble for pitching junk to earn a commission without regard for whether it's best for the client.

That's why there are so many great Advisors in the insurance industry. ;)

Mind blown.  :) Sort of like how Realtor is a trademarked member of an association while everyone else is "just" a real estate agent.

[AH013]

Mind blown.  :) Sort of like how Realtor is a trademarked member of an association while everyone else is "just" a real estate agent.

Hey, that's not fair.  Don't you realize how hard those professionals work on their 1-2 day examless real estate courses before they can earn such prestigious credentials like "Certified Neighborhood Specialist", or "Seniors Real Estate Specialist", or "Accredited Staging Professional"?  It's kinda almost like the bar, or the CPA....I mean if the membership dues are just as high it must be a serious credential that takes a lot of work to earn and makes you real smart, right?