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She paid into this policy for many years, every month. She lived in another state and I moved her into my home. She was diagnosed in the later stages at that point and that is about the same time that she stopped paying into this policy.

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Was it term life insurance? If so, as soon as the payments stopped, so did the coverage.
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And on the other hand, if it is whole life insurance, she has built up equity which belongs to her.
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I would look at the policy carefully. See if there is any mention of waiver of premiums for disability (Alzheimer's). Also see if there is an accelerated death benefit clause, which pays if someone is not expected to live more than 6-12 months (if this is the case). You can also have an elder law attorney review the policy, and let you know your options. I would also check with your local Alzheimer's organizations for assistance.
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Read the policy clearly & carefully to see what the terms are for default. If the policy is older - pre this millennium - they usually will have a cash value that is payable if the policy is defaulted but no Alz/Dementia reinstatement clause. The rules of the policy will be determined by the state it is drawn up in as FH/burial & crematory are state regulated. Newer policies can have a non-payment waiver in which the policy can be reinstated with all the past due paid and some % penalty (smallish maybe 2 - 5% of value) but only if done & paid in full within a specific timeframe (like within 12 months of the 1st non payment).

You know a pre-need done in another state could in the long run not be of very much value. I've gone over my mom's pre-need in detail as she's end stage hospice and have been able to do some changes to policy (1980's) as it is an old one and not as restrictive newer ones; the policy is really written and designed for death & burial to be done within a 60 - 100 mile range for costs to be at policy. ANything beyond that involves hefty transfer or transportation charges which are not in the policy. So yes the casket is paid for, but there will be a fee to ship it to the FH in the new state where she died OR a fee for transporting her body (which may have to be embalmed to cross state lines) to the old state & the original FH. For us any change has a 10% penalty to the paid up principal - this sort of penalty seems to be standard. A lot of how mom's pre-need was to be done was based on the 1980's and many things now have fees associated with them, like police escort was free in the 1980's, not now. Once you look at the hard #'s & if family is all over the country, you can see why cremation is more & more the choice made as it is the only option that is affordable & you can then have a memorial service on a date that enables family to attend. Good luck, changing stuff isn't easy.
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Caution: I would not involve a funeral home/crematory. Beneficiaries should come first. Term Policies are final....no pay, no coverage. Other policies such as whole life and permanent insurance MAY have a loan value, hence, the unpaid premiums could be taken out as a "loan" against the proceeds. This must be paid back of course. When the insured passes, why not just pay the funeral home? Why let life insurance get involved at all? When my husband died, I forked over $27,000. to the funeral home. They could care less about any insurance. Where am I going wrong?
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No payments, no coverage.
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N1 - you know I understand what your referring to. The FH aren't basically in your best interest. Personally I would never do a pre-need, the minutia of crap in my mom's preened is all tilted to FH best interest and don't get me started on the cemetery issues (they are totally different outfit from the FH too for mom).

But if Ann's ? is that her mom had a "death policy" that is a FH pre-need so what to do now that she has found out the mom has basically defaulted on it & she wants to get it reinstated so mom has a pre-need for funeral & burial when she dies. This is what I though Anna's ? & interest was all about. But perhaps not and it's a life insurance product that was defaulted on. Then yeah your approach is the way to go. Thanks Noreen.
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Anna, depends what kind of policy it is. If it's whole life, the premiums have probably been paid through dividends that have accumulated (if she's had the policy many years). Call the insurance company or a local agent.
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Oh, sorry. I see she's passed. If they aren't paying, then they don't have to. If you feel more comfortable about it, report them to your state's department of insurance regulation. It would be rare for an insurance company to refuse a death benefit if it were payable. That's not what they do.
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We don't know what type of policy it is. If it was an annuity policy, then the payments would be deducted from the value of the policy and insurance would have been continued until the balance was zero. That the insurance company didn't pay hinted to me it was term life which had not been paid on for a while. Unless we know what type policy it is, there's not much more we can say.
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