Legal Question in Insurance Law in Ohio

1 year ago I took over paying premiums on my life insurance. (my mother had gotten this 20+ years ago, she passed away last year and I took over) yesterday I received a bill for payment of interest on a loan my mother took out against my policy in 2003. I called insurance and they said I was responsible for paying this because the loan follows the policy. If I do not pay my insurance will lapse and I will receive a 1099 form and will be responsible for paying taxes on this loan. Money that I never touched! Can you please tell me how to handle this. I really don't care if my insurance cancels, but I don't want to fight the I.R.S. Over tax dollars. (especially on money I never received) thank you, Brad


Asked on 3/25/10, 6:15 am

1 Answer from Attorneys
Harold Paddock Harold Paddock Co. LPA

Your question is phrased as one of insurance law, but it really has more tax implications. You might want to check with a CPA or whoever does your taxes for advise on how to handle the IRS situation. You might also check with a probate attorney to see if the loan obligation or the interest is a debt of your late mother's estate.

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Answered on 3/30/10, 7:12 am


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