Lincoln National versus T. Boone Pickens?

I’ve certainly made no secret of my opinion of premium financing and investor owned life insurance. Personally I think the practices jump from one gray area to another just fast enough that no one can nail it down and say, whoa.

Until you involve T Boone Pickens, a man that not only has the savvy, but the money to clear up any gray areas. Apparently a few years ago a group of life insurance agents decided that it would be in the best interest of Oklahoma State university to get 27 of their oldest and richest alums to take out life insurance policies for $10 million each and finance the premiums.

Allegedly agents representing Lincoln National Insurance presented the concept of premium financing for nearly 30 very large life insurance policies on alumni who ranged in age from 65-85. Mr Pickens co-signed a loan to finance the premiums. He alleges that the policy illustrations were misrepresented and that the underwriting was mishandled such that the cost of insurance was much higher than it should have been.

The agents on the other hand claim that Mr Pickens encouraged those whose lives were insured to lapse their policies because the cost was much higher than originally presented.

He said, they said…….if it wasn’t for unscrupulous life insurance agents using questionable methods to create large sales where none would exist otherwise, there wouldn’t be any accusations flying.

Bottom line. In this case a university department of planned giving was able to be wowed into believing that they could realize a $350 million dollar gain without them or their alumni paying anything out of their pockets. Reading the story it strikes me that someone might be leaving some facts out. I will follow on this as it goes to court or gets settled.