Nords, if you are willing to name names, which insurance company or companies were the ones your Dad used?
In the 1960s he bought the policies from "State Mutual Life Assurance Company of America", whose corporate address was 440 Lincoln Street, Worcester MA. When I tracked down the status of the policies in 2012, the response came from "First Allmerica" in Topeka. The fine print on their stationery says they're a Goldman Sachs company. His 1035 exchange (in 2010) was issued by Bankers Life and Casualty Co, 660 West Chicago Ave in Chicago.
Bankers Life also handles his Medicare supplemental insurance policy. I haven't added up how much he's paid in premiums since 1999, but I suspect that they've paid out far more to his doctors & hospitals over the last few years than he's paid in premiums over the last decade. I hope Bankers Life has invested those premiums wisely, because the medical bills keep rollin' in.
When Dad retired (shortly after Mom's death) in 1987, he earned a Westinghouse pension. Of course he elected no survivor benefits. Somewhere along the line W was bought by CBS/Viacom, and today his CBS pension includes another $43K of life insurance with us sons as beneficiaries. I have no freakin' idea why a pension plan includes life insurance, but I wish Dad had spent a little more money on himself instead of "providing" for us kids.
His medication insurance also comes through his pension plan(!) via Medco. He's on several medications (blood pressure, antidepressants, Alzheimer's, occasional Vicodin) and his co-payments alone are about $30/month. I can only imagine what Medicare & CBS are paying.
When he bought his long-term care insurance in 1992, I think the policy was issued from Fortis or Time. When he made his claim in 2011 the policy was owned by John Hancock, and because of the 5% APY inflation rider they're paying out over $25 for every dollar he paid in premiums between 1992-2011. I project that policy will hit its payout cap in late 2014.
When I took over his finances in 2011, he owned shares of Hanover Insurance Group. I guess that meant he owned some sort of insurance through them (State Mutual?) before they went public, and he got shares from the IPO. I sold those shares in 2011 and 2012 so that's no longer a concern.
I have no idea how stable or capable any of these companies may be, so let me know if any of them are considered marginal. (I know John Hancock's claim/payment system is so bureaucratically dysfunctional that it's a mystery how they're making any money off the dropout rate.) At this point I don't know whether I'd try to change any of his policies to a "better" insurance company. (It's too late to cash out the life insurance policies, anyway.) I have things running pretty well with the status quo, I don't want to upset the care facility or his current providers, and I'm reluctant to make long-term plans for a 79-year-old Alzheimer's patient in frail condition.
Whole and universal life are massively oversold to the general public. If you are one of the few people who actually needs one of these policies, your advisors will tell you.
I think Dad was grossly overinsured from 1987 on. The "good" news is that someday (hopefully years from now) his life insurance bequests will eventually fund my own long-term care insurance policy. I suspect they'll also put my brother over the top for financial independence, so let me know if you're interested in buying a good dog-care business!
My spouse and I don't carry life insurance because we each have our own military pensions. (No Survivor Benefit Program, either, for the same reason.) I'll probably buy my LTC policy from the Federal LTC Insurance Program within the next decade. I sure hope Hancock isn't the only underwriter left in the sector by then...