Life insurance is requiring W-9

[terri conger]

Jurisdiction

Texas

I received a letter from State Farm on 11-12-2022 stating that I need to fill out a W-9 form. They said that I need to have the form returned by 11-17-2022 or they will deduct 24% of interest payable to me. First - there is no way that if I filled it out and put it in the mail it would make it in 5days - let alone be processed without delay. I don't receive payments from them as I have elected to have it reinvested into the policy. I have had this policy for almost 30 years and have never been required to do this. Is this a scam and if not- why after 30 years are they requiring me to fill this form out?

 

[justblue]

I received a letter from State Farm on 11-12-2022 stating that I need to fill out a W-9 form. They said that I need to have the form returned by 11-17-2022 or they will deduct 24% of interest payable to me. First - there is no way that if I filled it out and put it in the mail it would make it in 5days - let alone be processed without delay. I don't receive payments from them as I have elected to have it reinvested into the policy. I have had this policy for almost 30 years and have never been required to do this. Is this a scam and if not- why after 30 years are they requiring me to fill this form out?

You should call State Farm and ask.

 

[adjusterjack]

It's not a scam. Tax laws have changed substantially in the last 30 years.

You can send the form by overnight mail. Or maybe they'll accept it by email. You can ask the insurance company to delay the transaction.

The money is income to you. You'll pay tax on it whether it goes in your hand or is used for paid up additions or whatever. It's still earned and the 24% will go to the IRS unless you state on the form that you aren't subject to backup withholding.

Download the form and read it. It answers a lot of questions. If it's still unclear, you can talk to a tax pro.

 

[Tax Counsel]

Is this a scam and if not- why after 30 years are they requiring me to fill this form out?

I can't tell you if the letter you received is genuine. Only State Farm can tell you that. However, assuming it is legitimate, it means State Farm received notice from the IRS that you are potentially subject to backup withholding. That's indicated by the 24% rate of withholding that the company says it will take from distributions and give over to the IRS unless you provide what is needed to cure the backup withholding. For example, if you failed to report some interest or dividend income on a previously filed return, that can trigger a backup withholding requirement. The link I provided takes you to the IRS page that explains backup withholding in more detail.

 

[zddoodah]

I received a letter from State Farm on 11-12-2022 stating that I need to fill out a W-9 form.

Why?

They said that I need to have the form returned by 11-17-2022 or they will deduct 24% of interest payable to me.

Interest payable for what? I'm guessing dividends on a whole life policy.

First - there is no way that if I filled it out and put it in the mail it would make it in 5days - let alone be processed without delay.

If only there were some sort of electronic mail you could use or some sort of express mail service that could get it delivered overnight or within....

Is this a scam

Do you really think this insurance company - a company that issued you a policy you've had for 30 years and one of the biggest insurance companies in the country - is running a scam on you?

why after 30 years are they requiring me to fill this form out?

If only there were a device of some sort that you could pick up and talk to someone at the company and get this question answered....

 

[army judge]

If only there were some sort of electronic mail you could use or some sort of express mail service that could get it delivered overnight or within....

Goddness gracious, what a wonderful service that would be.

Alas, I can only fantasize about electronically transmitting my written communications.

If only there were a device of some sort that you could pick up and talk to someone at the company and get this question answered....

Oh my, Alexander Graham Bell tried to create such a marvelous device.

Alas, we're stuck with Marconi's telegraph and Morse Code.

Ezra Cornell was the founder of Western Union and a co-founder of Cornell University. That's not as wonderful as the device you mentioned, plus it isn't instantaneous as the wonderful device you "what iffed".

 

[adjusterjack]

Do you really think this insurance company - a company that issued you a policy you've had for 30 years and one of the biggest insurance companies in the country - is running a scam on you?

Could happen. I was scammed by two major insurance companies in the past year.

However, I agree that this one is not a scam.

 

[army judge]

Could happen. I was scammed by two major insurance companies in the past year.

Gasp, not you, mate?

Stay alert citizen, scammers are rapidly increasing, as are their scams.