I’ve had private Term Life Insurance with same ins company for 4 years. I pay the policy on a monthly basis. Recently, the insurance company sent a letter along with a w-9 form (request for taxpayer identification number). I have not changed my name/social security number (what they have on record is correct), and have not made any insurance claim. The insurance company has not paid me anything, I cannot and have not sold/transferred the policy to anyone. No one has claimed benefits, either (lol I’m still alive). The letter states that I can be penalized if I do not sign and return the w-9.
I thought the only purpose of the w-9 was to issue form 1099 for payment received by a taxpayer – but I have not received any payments nor have I made any claim against my insurance, and the policy has no cash value.
For what legitimate reason would they be asking for this?
To falsi fiable:
I do not consider it a reasonable request because the info they have is correct, and I could never be a payee on my own term life insurance when I die. The w-9 is requested for MY information, not the future claimant’s. The insurance company is not and will not be paying me anything when I die.
As to having to certify my SSN under threat of penalization, that is rediculous – the insurance company has no reason that I know of to issue me a 1099, plain and simple – so WHY would they be requiring that I sign a form w-9?
I thought the only purpose of the w-9 was to issue form 1099 for payment received by a taxpayer – but I have not received any payments nor have I made any claim against my insurance, and the policy has no cash value.
For what legitimate reason would they be asking for this?
To falsi fiable:
I do not consider it a reasonable request because the info they have is correct, and I could never be a payee on my own term life insurance when I die. The w-9 is requested for MY information, not the future claimant’s. The insurance company is not and will not be paying me anything when I die.
As to having to certify my SSN under threat of penalization, that is rediculous – the insurance company has no reason that I know of to issue me a 1099, plain and simple – so WHY would they be requiring that I sign a form w-9?
Finance1o1.blogspot.com ® 7:49 am on August 30, 2010
You should contact the company about it. My understanding of the W9 form is to verify your SSN and if you are subjected to backup withholding. If you own stocks of that company, then I could see why you need to fill out W9. But if this is just life insurance, it makes no sense to fill out W9. The policy must pay death claim to your beneficiary if you die during the term. That’s the law of every state in the United States that insurance companies must honor the contract, unless an investigation is needed to delay payment of death claim. In that case, the company must notify the insurance commissioner and the beneficiary.
Anyway, call the company to find out more information about it. I find it strange that they send it to you. Maybe its a mistake?
falsi fiable 7:49 am on August 30, 2010
Seems like a reasonable request. Why do you object to certifying the SSN they should already have for you? They will treat that as an affidavit for any future claims.
Ginger 7:49 am on August 30, 2010
It’s standard practice to have a W-9 on file whenever a life insurance policy is issued. The primary purpose is in the event you earn dividends or interest income on the policy, the IRS is notified via a 1099.
I understand you stated the policy has no cash value. That may be true, but there are term policies that earn dividends, thus producing income to you. You may not realize you’re getting dividends as they may be being reinvested into the policy.
Also, many term policies have a convertibility feature which allows you to convert your term policy into a permanent, whole life policy. The W-9 is required to be on file for all convertible policies.
Finally, just because your information is correct on file, keep in mind, the information doesn’t take the place of a W-9 form with your signature. It is required and they will not let up until you comply.
Insurance Pickle.com 7:49 am on August 30, 2010
Call and ask. They’re probably trying to verify your social security number.
mbrcatz 7:49 am on August 30, 2010
I’d call them and ask. I don’t believe it’s reasonable for a TERM policy.
But it could ALSO be a mistake on their part – maybe someone pushed the wrong button, and sent that form letter to a whole bunch of people with your type of policy, or to your zip code, or your first name, whatever.
My first thought was "scammer trying to get your personal information", but they wouldn’t have your insurance company and policy number name, so it’s probably not that.
StephenWeinstein 7:49 am on August 30, 2010
If they already have your name, address, and social security number, then the W-9 will not give them any new information. Even if they have no valid reason to request it, giving it to them will do no harm and will take less time than fighting the penalty.
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