I want to start by saying this is real, not rage bait.
When I was a baby, my grandmother took out a Prudential life insurance policy on me. There was never full clarity communicated to me of the policy number, or the amount it contained, but she would communicate to me fairly frequently that this policy existed, just never how to access it, even going so far as to tell me in my mid 20s "if you ever needed money for grad school, you could borrow against it" and "if you ever got sick, you could borrow against it". My mom (her daughter) was also listed on the policy, in case I died as a child or minor.
My grandmother died recently, in her 90s. Despite having interacted with my mom many times since then, even a few weeks ago, I have not heard anything about the life insurance policy, as the estate has settled out…Until last night.
I'm in my hometown visiting my parents for the holiday. My mom glibly announced last night that she, with the help of a distant family member who has a finance background and is the executor of the estate, managed to make it through the Prudential phone tree, and cashed out my life insurance policy. I was stunned. She then commented, "the market is down, so if they'd let me talk to someone who spoke english and I'd managed to do this two weeks ago, it would have been worth 3k more." I was livid–my understanding is that could have likely been rolled into something else, and worth more, and also, taking something out when the market is down is not the move. She then continued, "Your grandma always felt bad she didn't take a life insurance policy for your younger sisters (My brother and I were born in the early 90s, my sisters were "surprise babies" my mom had in the early 2000s,), so she wanted the policy to be split between you and your sisters. So that's what I'm doing when the check arrives." Just like telling me, not asking. I was also shocked bc She has not mentioned any of this, if it was truly grandma's will, and i literally just saw my mom a month or two ago.
She and I are not close, but she could have called and told me this. She's telling me after the fact, and after cashing the policy out. Additionally, my second cousin who is the executor, also never called or mentioned this to me. And lastly, my grandmother and I were actually VERY close, and I lived close by her (for context–when my grandma died, I was with her. My mom, who could have made it in time, did not fly in for her own mother, bc it was the day before Christmas and she was "wrapping christmas gifts". I will never get over this).
My mom doesn't understand why I'm angry, and i'm waiting for Prudentials call center to open so I can make some phone calls. Mom won't tell me what the full value is/was on the policy at time of cash out, but what I do know is my younger brother also has one, and she plans to do the same with his but wasn't successful yet, and quote, "yours had about 10k more in it" when I remarked mine likely had more because I am 3 years older than him. So I don't know what the value of the policy was, but I estimate it wasn't small.
What grounds do I have? What can I do? Also, can anyone just validate how unethical this was, or am I just living in my own emotions here?
My mother gained access to MY life insurance policy, managed to cash it out and announced she is splitting it amongst my siblings. What grounds do I have?
byu/Feelingterrbltoday inpersonalfinance
Posted by Feelingterrbltoday
45 Comments
Did you call the life insurance place and ask why they cashed it out to someone not on the plan?
Not sure what type of life insurance policy can be invested in the stock market, but the sp500 is down 2% in the last two weeks so if 2% is $3000 then the whole policy would be about $150,000
Call the company and calmly explain you are not dead and someone not you has cashed it out.
Find out who the owner of the policy is. Even though it covers you, it might not be you and the owner is actually your mother who has the right to sell it.
Are you sure this was a policy on YOU? It shouldn’t be paying if you’re still alive if true.
Are you sure this was your policy and not a policy your grandmother had on you?
Life insurance isn’t normally affected by market conditions. Sounds like it may have been whole life or universal life and had an investment component. If you were the sole beneficiary on the policy, and you are of legal age in your state, your mother would not have been able to cash in the policy. Is it possible she was listed as the primary beneficiary?
Depends who the policy owner waa after your grandmother’s death. The policy owner has legal control of the policy and the right to change it, liquidate it, change beneficiaries, change the owner, etc. If your grandmother set it up with your mother as the contingent owner then it automatically transferred to her ownership and control when your grandmother died. If there was a will where your mother was listed as a beneficiary it could have been used to transfer the asset to her with the agreement of other beneficiaries. Prudential may not tell you anything because as the insured you don’t have any legal control over the contract. Only the policy owner does.
Unless it was a fully paid up policy, if you were not making payments it wasn’t -your- insurance, it was insurance on you. The fact that you never had the information for it indicates that you may not have ever had ownership of it.
It sounds like your grandma did mean to pass it on to you but she may have in fact changed her mind. You can ask to see her will and the instructions her executor was following.
If your mom was listed not just as a beneficiary but as a successor owner, then legally (whether ethical or not) she had the right to cash it out. It sounds like you may never have been listed as an owner, in which case legally you would not have had any access to it. :/
If you and she were co-owners on the policy, then there is likely nothing you can do about the policy. However, it sounds like your mother is toxic af and this should help you contemplate your relationship with her moving forward.
My grandfather had money set aside for my college and for my later years. We were also very close. He had my father “manage” it for me when I was younger, who felt entitled to skim off the top thousands of dollars in self-claimed “management fees”. He stole what remained for me outright after gramps died. I will never forgive him for this (among other things). Validating your feelings that what your mom is doing is f*cking shitty and that having an immediate family member steal from you is also f*cking shitty.
Mom. Here’s the deal. You did something shady and sneaky and not of good intent. If your intent good, you’d have told me beforehand. Make this right and give the money back to me or you will never see me again. You have irreparably damaged our relationship by flat out lying and abusing me financially. Then walk away. Don’t argue. Don’t fight. Don’t listen. Walk away. Don’t call. Don’t answer calls until money shows back up. The end.
This was never your money. Grandma paid for a lottery ticket that would pay her if you died, and otherwise be invested in stocks. She paid a moderately high fee for this. Mom inherited that ticket. It was never your ticket, it was just a bet on your death or not.
Mom could have cashed it out and kept her money. Her money. Sounds like she’s planning on making some big gifts instead; good for her. An appropriate response might include “thank you.”
(Or there’s a written will saying the whole thing is yours; you can ask the executor for a copy)
Grandma told stories about this ticket and her dreams of how it could be used. That’s the real reason we buy lottery tickets, to dream dreams and tell stories. Right? And child life insurance policies like this are all about dreams and nightmares.
My advice is to follow the wiki advice but keep the money separate and think of it as a gift from Grandma; I have savings bonds from my grandparents that I rolled over into an IRA as they matured and I think of them and thank them every time I interact with it.
I have a feeling that your grandmother owned this policy and that policy covered your death.
Then, your grandmother either listed your mother as the successor owner of the policy or named no one. If your grandmother named no one, then it’s possible (likely) that your mother was the next in line to own this asset based on state law.
Your grandmother should have transferred ownership of this policy to you when you became an adult or named you as the successor owner.
I don’t know your grandmothers intentions but you may find that your mother has the legal rights to the policy even if it wasn’t your grandmother’s actual wishes.
Death and money makes people act stupid sometimes.
I wish you the best.
“My mom was also listed on the policy.” This sounds like a whole life policy. My guess is you are likely the insured, but your mother is the owner. Your mother therefore has the legal right to cash it out at anytime. I would call the insurance company and inquire. Without the policy number, they may be able to look it up by your social security number and tell you if you were the owner or not, but I doubt they cashed it out to a non-owner, unless she fraudulently pretended to be you when completing paperwork.
I’d suggest this was not money you knew of, didn’t pay for, and seems you may not have owned.
Is it worth what seems like a small amount overall to have a riff with your mom and sisters?
Family should be more valuable than money.
Main question is, who was the nominee on that policy? If she was able to take it out, that tells me she was the primary holder of it.
Unless you have a legal document that states you were the sole proprietor of that policy, aint much you can do because what you grandmother promised you is not a legally binded statement.
One statement that im confused with is, your mother was also on the policy in case of your death. That doesnt sound right. Because if that’s the case, she wouldn’t have rights to take out that policy. She would need your death certificate first. This sounds like your grandmother had her as primary holder of that policy and you as a secondary and she trusted her to her words that this policy would go to you.
Dont hit the court without fully understanding her policy first. And to your ethics question, unless grandma had explicitly stated in her will or on her policy that this money is for my grandkid (just you), your mother has full rights to take it out as the primary beneficiary.
Each life insurance policy has option to have % based beneficiary. If she had you as % you would split it with your mom, but it she had her as primary and never changed it to you as primary, you on your mom’s mercy.
Take what she gives you and dont ruin a relationship over the rest. If she is going to split your siblings $$ as well, you will compromise that income as well.
TL,DR: Granny got hit by a bazooka and fkd up a bit.
If she bought the policy on your life and is the owner of the policy, she can do whatever she wants with it.
Hey bud, you’re the insured party, NOT the beneficiary. Your mom is the beneficiary. She gets the to do whatever she wants with the policy. Just take the funds and move on with life. Shitty thing to do but it is what it is.
She’s probably doing this to steal money from the estate in other ways. You need to look at the probate and make sure she’s not stealing from you in other ways.
There can be up to three parties in a life insurance contract.
1. The insured. That is you in this case.
2. The owner. This was likely your grandmother. For child policies, often the owner title is transferred to the child when they become adults. But it sounds like that did not happen or you would’ve been aware of it and would have continued paying the premium.
3. Beneficiary. This is person that receives the life insurance amount should you pass away. This often is the owner but could also be a different person
The owner of the policy has full administrative rights to change the beneficiary and also to use the cash value of the policy. They can also cancel the policy. If you grandmother never changed ownership, then when she passed, ownership goes to the heirs of her estate. Unless the will specifically calls this item out and designates who the policy is gifted to. There is a good chance this policy was not included in the will. But if it’s part of the estate, your mom has every right to decide how the policy funds should be distributed.
Only a copy of the will and you talking to the insurance company can determine that.
First: Call prudential to understand how ownership was structured on your insurance policy. As far as bank accounts go they usually list your grandmother as the owner with rights of survivorship going to you. But considering your mother was able to withdrawal this money she either falsified her information or was legally authorized to distribute the funds as a beneficiary.
If your mother falsified information you will be notifying them of the fraudulent transaction and they will cancel the check and assign this to their fraud department. You need to get contact information from Prudential to be able to contact them or have them contact you while this is being resolved. They may be able to reverse the transaction.
If your mother was listed as a beneficiary there’s nothing you can do.
If your insurance policy was still owned by your grandmother. You need to get a copy of your grandmothers will or find out where this is in the court probate process. Your mother shouldn’t normally be able to distribute assets from the estate without the courts approval first and this usually comes at the very end of probate. If there is a will you may have been mentioned as a beneficiary there and you need to understand your rights and entitlements to any and all assets.
Secondly, if you are able to prove that your mother shouldn’t have had access to it even as an executor of your grandmothers estate you need to file a police report against your mother for financial fraud.
Lastly if you’re able to have Prudential cancel the check but they are unable to reverse the transaction (highly unlikely) you can sue your mother for monetary damages.
I’m sorry you’re going through this. But this is why it’s important to keep information on all of your assets. If your name was in the policy it was likely tied your social security number and you would have been able to call and also get information on it.
Hmm my uncle took a policy on me as a kid but had the company mail the paperwork to my dad. I now wonder of he still did a cashout on me?
Keep us posted on your journey!
This sounds like something my mother would do. My family is currently fighting over my very alive grandmother’s money. I wish OP the best and agree with earlier advice to stay as rational and calm as possible with the people at Prudential.
Sounds like a single premium whole life insurance policy to me – my grandparents were sold one in the 80s for me through the polish national alliance- think they bought it for $250. My particular one was marketed for the $5000 death benefit to help with funeral expenses. Whole life is both life insurance and a “savings” product but does neither of them well(unless you’re HNW, there are better options – my cash value would be 4-8x what it is had the original premiums been invested in index funds for example).
More than likely your grandparents were the owner of the account (they paid the premium) which would mean their estate/executor would gain access to the cash value of the account when the account owner died, which is what sounds like happened. So even though the policy is insuring you, has a death benefit that is attached to your life, the actual benefit/cash value is/was your grandparents – that is what was accessed and you have no direct claim to(companies like prudential are pretty cautious paying this stuff out and verifying the people accessing are entitled to).
Your mother knew your grandmother’s wishes – that she regretted not covering your siblings. Your mom is distributing the asset your grandmother owned per her wishes. Yes, it’s a surprise to you, but I think you would have solace knowing that’s what she wanted, money for you and your siblings.
Unfortunately, sometimes our loved ones don’t correctly get their affairs in order. They think they are helping you but in the end, their arrangements were insufficient or actually harmful. Hopefully the executor can provide some clarity re: her will at least.
Contact the insurance company, and get a lawyer
I took out life insurance policies on each of my children when they were born. Small but enough to cover us if one of them passed and I needed to take some time off during that loss. They are adults now but I still pay for the policies until they are willing to take over the payments. Currently, they are mine and until they are signed over, I can cash them out. Maybe they are like that and then there’s not much you can do. Grandma should have signed it over to you then you could decide to keep up the monthly payments or close it out. Did you ever take over the payments?
When you where a baby, how much you paid for this policy insurance?
If it makes you feel any better, your grandma had good intentions but that policy was terrible and it was likely the best decision to cash it out. Please never use whole life as an investment vehicle.
It’s not your money and wasn’t ever for you or it would have been in your name. It was on you. It’s like placing a bet on you dying. You don’t get he winnings the person who owns the policy does
Doesn’t sound like you ever owned any portion of this policy. It might have had your name on it but other than that you didn’t have a stake in it.
Grandma telling you you might be able to draw down on it in an emergency has given you a feeling of ownership but it sounds more like she was just generally trying to create a nest egg for her grandchildren.
Sounds like your mother wants to be a resident of the lowest rated nursing home in your local area when she’s older and needs your help
Sounds like a investment bond held in a life assurance policy? You need to find out if you’re a life assured or the policy holder. Two very different things.
The old me would have said f them and bring on criminal charges but life is too short.
I would at least make sure u are get a proper share and NEVER talk to them ever again.
Your 2nd cousin explains everything about the situation and why it is possible, your mother did what she did.
Likely your mom was the owner of the policy and not you
OP, sounds like you were the insured, not the owner. The insured has no say in what happens to the policy. The owner can do whatever they want with it. Your mom likely became the owner when grandma died. Thus she could do whatever she wanted, which could be to give you nothing.
Op – your mom was technically listed as an owner. She was allowed to do what she did. Prudential has no stake in this.
Your grandmother told you one thing but told your mother another. Unless spelled out in her will, neither is untrue or more valid.
The fact that the life insurance was in your name doesn’t mean it was intended to benefit only you. It was an investment vehicle, pure and simple. By its nature, life insurance is intended to benefit the survivors just as much as the covered.
Your emotions are clouding this and the fact that you believe you were closer to your grandmother than your mother doesn’t change things. If your grandmother didn’t specify anything in her will then your side of the story is just as much supposition as your mother’s.
You have zero legal standing unless your mother violated the will. And even ethically there is no wrong of your mom truly believes she was following your grandmom’s wishes.
Personally, that’s a different story.
Tell Prudential you believe you are the named beneficiary and would like a copy of the policy to determine whether or not the cash out was fraudulent.
Since you were close to your grandmother, why didn’t you get all this straight when she was alive?
You mentioned your mom was on the policy, so she likely had a right to do so. Obviously check with the insurance company to confirm, but I wouldn’t be surprised if it was never changed since you were a minor at the commencement of the policy.
I’d call and try to get the insurance company to stop pay any checks issued under the policy, explaining there is a dispute and potential fraud.
Posting for OP’s vision. u/bw2082 had the first right idea:
Your mom may have been listed as the Contingent Owner and automatically became the policy owner or became the policy owner through the estate settlement process.
If one of those is the case, your mom was perfectly within her rights to surrender the policy. Even though you are the insured, the policy owner controls. Prudential would be very careful to ensure transfer of ownership was done correctly. She didn’t just ‘talk her way into this’.
One part of her story that doesn’t checkout is that most companies don’t let you surrender a policy on the phone. I don’t know Prudential’s rule but that isn’t typical – especially if you’re talking about the 6 figure sum you’ve mentioned. You may still have time to connect with Prudential (doubt they’ll talk to you much but may be worth a shot) or talk this through with your mom.
If you want to take some comfort from this situation in the context of your other posts that say your relationship with your mother is strained: If that policy had cash value in excess of $100,000, the death benefit was significantly higher. The silver lining is that your mother no longer controls a policy creating windfall when you die.
Mom may also face tax consequences on the surrender – you should probably tell her this so she doesn’t try to claw back some of the money 9-12 months from now. She’ll also have to file gift tax paperwork (IRS form 709) if she gives you more than $19,000.
You will not face those taxes because the transfer to you would be considered a gift.
Sorry to say, but the only mistake here is very likely that you have believed all your life that this policy was yours.
Why is your second cousin handling your grandmother’s affairs. Second cousin means they dont share the same grandparents.
Can’t help you with this situation other than the fact that you should come to terms with parents doing dumb shit that can be insanely selfish and nonsensical or even sociopathic that might make your blood boil and make you want to do something unspeakable to them. Come to terms with this now and live a life where you don’t give them power over you and your assets going forward.