Life insurance and annuity premiums paid at cash out or death?

Question

no up front or monthly premiums, all deducted from payout...is this normal...i have a good agent and he says it is legal and approved ? is it?

Answer 1

This makes no sense at all.  You're saying you pay nothing at all for the policy and they just give your benficiaries money when you die.  And you couldn't cash out because you put no cash in.  

If you pay no premiums it's just like they're giving you money, and no company is going to do that.  "Hey, you don't have to give us any money, but if you die we'll give your beneficiaries X dollars!"  Not happening!

Are you talking about someone else owning and paying premiums for a policy on your life, and that they take part of the death benefit?  That's the only way I could see you or your beneficiaries getting any money without putting in any money.  If so this  is almost never a good thing to do - these are the stories you hear about when someone is killed for insurance money!

I think either your agent doesn't understand how the policy works, or you don't understand what the agent is telling you.  Go back and  speak to them, speak to their boss and then speak to the company.  Better yet, speak to an agent with a different company!

Answer 2

Great website, resourceful,user-friendly should be able to answer your questions.http://insurance.free-onlinetip.info/ins...

Answer 3

For a contract to be binding between you and the Life insurance company there must be a consideration ( which is the premium payable ).

So you agree with them that you pay so much either monthly or annually  and they promise to pay xx amount on death or maturity.

Therefore going by this I am unable to understand the what type of life insurance he is trying to sell you.

Please call the life insurance company themselves and confirm what your agent is telling you.

Answer 4

If you are in reference of taking life insurance proceeds and putting that into a single pay annuity, it is legal.  The insurance agent recommends it because it is a nice commission check and the insurance company may even give him a bonus if they get you to immediately annuitize (basically hand the money to them and the pay you for a certain time or death.)

The problem with this though, if you die right after they set it up and start paying, they keep the money.  They keep all of it.

If he is recommending this off the bat, find someone else.  It is not always in the clients best interest to do that.

Legal? Yes. Approved? Only if you approve.  Ethical? Yes.  Moral? Not really.