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Category Archives: Woodbury law firm


Cashing in Old Life Insurance Policies

Cashing in Old Life Insurance Policies

Let’s examine what you should do when cashing in old life insurance policies. Frequently, people have old life insurance policies that require a review for purposes of the viability and an inquiry into the current “cash value” of the policy. Over the years our law firm has had many people who have come in with life insurance policies which are thirty, forty and even fifty years old. Before you can do an analysis, you must understand the difference between the two following descriptions of life insurance. For the purposes of this article, we discuss whole life insurance policies only.

Face Value. The “face value” is the overall death benefit, meaning the amount of insurance that will be paid to the beneficiary of the policy upon the death of the insured. For instance, if the insurance policy says (i.e., on its face) $50,000, then the face value of the policy is $50,000. When you die, there may be additional interest or dividends added to that amount, but it depends upon the policy.

Cash Value. The cash value is the amount that the insurance company will pay you right now if you requested to surrender the policy. In other words, the “cash value” is the amount the insurance policy is worth on the date of your inquiry to the company. If you elected to surrender the policy for cash value, you are forfeiting the death benefit, in return for cash now.

The issue arises when the difference between the cash value and face value are relatively small, which creates the need to conduct a risk-benefit analysis as to whether it is more prudent to surrender the policy now (i.e., take the cash value of the policy) or wait until the insured’s death for the face value.

For instance, if the face value of an older policy is $5,000, and the cash value of that same policy is $4,600, it may be worth “cashing in” on the policy, instead of waiting for the face value upon the death of the insured. Under this scenario, if the insured were to die today, the face value would pay out $5,000 (plus any accrued dividends and/or interest). On the other hand, if you “cash out” the policy, you would receive $4,600 now (or as soon as the insurance company distributes the cash value).

Nobody knows when we are going to die, but often the differential between the face value which will be paid at the time of death and the cash value is so small that it makes sense to simply liquidate the policy right now.

The first step in this analysis is to contact your insurance company and find out what the cash value is and what the face value plus accrued interest would be at the time of death. If, for instance, the difference is small, and the insured is in very good medical condition, you may want to cash the policy in right now. Obviously, if the insured on the life insurance policy is, for example, dying of cancer, you would not want to cash in the policy, but instead wait until after death for the face value.

Like many things in life, this is a risk-benefit analysis and there is no right answer because we do not know when we will die. The point being, you should review your cash value versus face value and determine if it may make sense to cash in the policy early.

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IMPORTANT LEGAL NOTICE UPDATE FOR THE YEAR 2020

As we usher in the new year 2020, it is very important to understand that you should not abbreviate the year “2020” when signing and dating documents as “-20”. For example, if you dated a document, “1/25/20,” anyone could subsequently add any two-digit number after the “20”, which would alter the document to read a date as 1/25/2018 or 1/25/2019. The “20” standing alone can be easily forged or altered.

While this is unique for the year 2020, it is nonetheless imperative that you write out the entire four-digit year 2020 when signing and dating any document. It is important to protect yourself from any potential fraud, scammer, or any unscrupulous individual.

Additionally, with the turn of the new year (and new decade), it is important to revisit your estate planning documents, including, your Last Will and Testament, Power of Attorneys and Living Wills (also known as an Advance Directive). If you have any questions regarding your testamentary documents or wish to create an estate plan, please contact our office at (856) 845-0011 or by email.

Your Legal Rights Against Telemarketers

Your Legal Rights Against Telemarketers

Do you know your legal rights against telemarketers and spam calls? The Telephone Consumer Protection Act (“TCPA”) was passed by Congress in response to increasing consumer complaints regarding telemarketer and debt collector calls. The TCPA’s aim is safeguard consumer privacy and to reduce the number of nuisance calls.

The TCPA makes it unlawful “to make any call… using any automatic telephone dialing system… to any telephone number assigned to a… cellular telephone service.” 47 U.S.C. 227(b)(1)(A)(iii). The definition “automatic telephone dialing system” includes systems which, like predictive dialers, have the capacity to dial stored numbers without human intervention. See 47 U.S.C. 227(a)(1)(A)-(B). The TCPA also makes it unlawful “to initiate any telephone call to any residential telephone line using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.” 47 U.S.C. 227(b)(1)(B).

A telemarketer or debt collector violates the law when they make an automated “robo” call, pre-recorded message, or text message to a consumer’s phone, unless the consumer previously gave the telemarketer or debt collector permission.

Please be advised that the consumer can revoke that consent at any time by notifying the telemarketer or debt collector to stop calling. Moreover, a telemarketer or debt collector is in violation of the TCPA when making solicitation calls to consumers whose telephone numbers have been registered on the “Do-Not-Call List.”
Consumers can add their phone numbers to the Do-Not-Call List registry by visiting https://www.donotcall.gov/Register/Reg.aspx

So, what do you do if you think you’re receiving calls in violation of the TCPA? Consumers who are receiving such calls can take a few steps to document the violations, such as:

  • Obtain and save all phone records and highlight incoming calls from debt collectors and telemarketers
  • Make a written record of the calls you are receiving, specifically, recording the date of the call, time of the call, caller’s identity, and a summary of any conversations held with the caller
  • Save all voice messages
  • If you have revoked your consent to receive calls, keep a copy of the letter.

Consumers may also file a lawsuit against the telemarketers or debt collector for the violation of the TCPA. A consumer may recover:

  • Up to $500 for each violation of the Do-Not-Call registry,
  • Up to $500 per phone call that violates the TCPA, and
  • Up to $1,500 per phone call if the consumer can show that the TCPA was violated knowingly and willfully. See 47 U.S.C. §227(b)(3)(B); 47 U.S.C. §227(c)(5)(B); 47 U.S.C. §227(f)(1).

The TCPA does not provide fee shifting rights to recover counsel fees, thus, the statute, as written, is essentially form over substance. It is likely that the cost to pursue a lawsuit exceeds any recovery. It is advisable (and free advice) to register your number with the “Do-Not-Call List,” as provided above.

Recently, a bipartisan bill named the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act (“TRACED”) was introduced in January 2019. If passed, TRACED will ensure that phone companies use new technology to identify calls as potentially fraudulent (such as spam calls) to inform consumers whether to answer.
Due to the complexities and intricacies of the laws, our attorneys at Puff & Cockerill, LLC are available to help ease the burden and navigate the legal waters. Puff & Cockerill is a full-service law firm, with two offices in Gloucester County and an office Camden County. To schedule a consultation or speak with one of our consumer law attorneys, please feel free to call our office at (856) 845-0011 or email at info@pufflaw.com.