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Beth asked in Business & FinanceInsurance · 10 months ago

Would a $200 life insurance policy purchased in 1938 only pay a death benefit of $200 in 2019? Is inflation factored in? How does that work?

7 Answers

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  • 9 months ago

    A life insurance policy will do whatever it says in the policy.

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  • 9 months ago

    Life insurance, generally, is when you pick a dollar amount that pays out when you die. If you picked a $200 benefit, that's what pays out when you die. No inflation.

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  • 9 months ago

    Read the policy. It will say if any interest is paid on the cash value and if so, the rate of interest and other terms and conditions.

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  • Judy
    Lv 7
    10 months ago

    Read your policy. Inflation generally wouldn't affect it.

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  • car253
    Lv 7
    10 months ago

    The death benefit includes the face amount plus dividends plus interest on the dividends all those years.

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  • 10 months ago

    Presuming it's paid up, no loans, etc...it would be safe to assume that it's worth more than $200. My guess would be 2-3 times that judging from other ones that I've had experience with, but nobody hear knows for sure. Inflation isn't factored in, but dividends and/or interest do compound typically.

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    • car253
      Lv 7
      9 months agoReport

      Correct. But not sure if a non-professional would understand this. Too complicated. This person needs to sit down with someone to explain it.

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  • y
    Lv 7
    10 months ago

    Cash value that is, if it is even still active, up to date, and the company still even exist. No inflation unless it is somehow spelled out in the terms of the policy.

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    • car253
      Lv 7
      9 months agoReport

      If there are dividends there is a new dividend earned each year plus interest is earned every year on the dividends. That can really add up. That is why I advised never to cancel these old policies. Usually there may be a taxable gain. Better to let it ride and pay out when someone dies.

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