Stingl: Woman nearing age 98 is outliving the life insurance she bought to cover her burial

Lorraine Guenther and Thrivent Financial insurance company had a deal, or so she thought.

She would pay them a premium of $500 a year for the rest of her life. And they would someday provide a death benefit of $25,000 to cover her funeral and burial.

The universal life policy took effect in 1988 when Lorraine was 67, and it came with a maturity date of February 2021 when she is 100.

But now, three years earlier than that, the company is telling this grandmother the cash value of her policy will dwindle away to nothing later this year, and the death benefit will be gone, too. 

At age 97, she apparently has outlived her life insurance.

"In my words, they're penalizing me for living," she said. "I hope nobody else takes out that policy because they're going to have the same problem I've got right now. When they need it, it won't be there."

Part of what's happening here is that the cost of insuring someone so old is chewing up all the cash value of the policy at a rate exceeding $300 a month, double what it was three years ago. The policy had a cash surrender value that hovered around $10,000 10 years ago, but it's down to $2,800 now and dropping fast.

Lorraine contacted Thrivent recently and was put in touch with an agent who suggested that lowering the death benefit to $10,000 would buy her some time with the policy, but not beyond next year. Lorraine turns 98 in April.

"He said, 'The Lord has been good to you and has allowed you to live all these years.' "

"I'm very grateful. Thank you, mister," she replied. "But I still expected to get my money when I passed away so I could be buried."

It's not surprising he brought God into it. Thrivent Financial used to be known as Thrivent Financial for Lutherans and before that as Aid Association for Lutherans. Lorraine bought the policy through her church.

"The men would come to church and talk to us and we knew them as friends. The man who prepared it for us was a friend of my husband's," she said. "It's your church that's doing it so you do feel comfortable."

She lost touch with that agent, who likely has died by now. Lorraine's husband, Harold, with whom she raised three sons in Wauwatosa, died in 2002. She now lives in an apartment at Luther Manor in Wauwatosa and stays active with exercise and volunteering.

Lorraine got her sons involved, and soon letters were going back and forth between the family and Thrivent. Son Jim said he doesn't think anything illegal is going on here, but rather a "built-in stick it to you."

The family filed a complaint with the Wisconsin commissioner of insurance, laying out the details and asking for a refund of every nickel Lorraine has paid for the policy, an amount approaching $20,000. They're awaiting a reply.

I contacted Thrivent to see what's going on here.They asked me to submit questions by email, which I did, ending with this one: Is this fixable, or just a cautionary tale?

A statement from Thrivent Thursday says a policy like Lorraine's offers no guarantee of coverage until age 100. Notices are sent to customers to let them know how long their policy is expected to last, based on the premium, current interest rates, policy costs and the cash value. Low interest rates like we've seen in recent years may lead to higher premiums or earlier lapse dates.

"Members have a wide variety of life insurance products available to them. A life insurance contract for a 67-year-old female that guarantees coverage until the age of 100 would have a significantly higher premium, exceeding $1,200 a year, compared to a product with flexibility," the statement says.

Sounds like Lorraine and her family will need to devise a new plan to pay for her funeral.

Thrivent's slogan, "Connecting Faith and Finances for Good," didn't quite work out this time around.

Contact Jim Stingl at (414) 224-2017 or jstingl@jrn.com. Connect with my public page at Facebook.com/Journalist.Jim.Stingl