What recourse does an insured person have if they have paid insurance premiums that exceed the face value of a policy?

UPDATED: Aug 24, 2011

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What recourse does an insured person have if they have paid insurance premiums that exceed the face value of a policy?

My 88 year old mother has 2 small insurance policies ($3,000 each) that she has had since 1976 and 1983. I just discovered that her premiums have far exceeded the face value of the policies. Can she recoup any of the premiums paid, or can she demand some paid up insurance policies?

Asked on August 24, 2011 Virginia


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If your mother's payments on these small insurance policies (presumably life insurance) have exceeded over the years the current face value of them, she should contact her account executive as to what the best course of action is to do with them. Meaning, is there a build up of equity in the policies where she can cash them out or not?

The interesting thing about insurance is that it is not for the person in whose name it is in, but rather is for the policy's beneficiary. The insurance company prefers that the policy holder on a life insurance policy lives a long life after the policy is placed so as to not have to make a pay out on it before the profit margin is reached.

Your mother's policies have been in effect for twent-five (25) plus years. She is not able to recoup any of the premiums paid. As to the terms of the policies and cash value within them, you need to read their terms.


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