ADDITIONAL INFORMATION:

My ex-husband passed away and our kids are the beneficiaries of his term life insurance. When I called to file the claim I was told that his policy was active. I was sent the paperwork and all of a sudden several months later, the company says that “after further investigation” they’ve found out that payments stopped several years ago. And there is a small cash value to the policy which is what kept it active. It was a 30-year term policy. I don’t have a copy of the policy.

Is it possible for the policy to be active if it lapsed so long ago? I don’t have access to my ex-husband’s bank records.
What can I do to verify that what the insurance company are saying is true? We have young kids and this money will help me raise them.

ANSWER BY MARGARET CROSS-BELIVEAU:

Term life does not have a cash surrender value. As soon as you stop paying, the policy will lapse. A whole life policy will have a cash surrender value. If you stop paying and don’t withdraw the cash surrender value, the premiums will be paid out of the cash surrender, which in turn will reduce the payout upon death.

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Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice.

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The estate administration attorneys at the Beliveau Law Group provide legal services for probate, estate administration, and trust administration. The law firm has offices and attorneys in Naples, Florida; Waltham, Massachusetts; and Salem, New Hampshire.