Insurance: A Case For Withholding Premiums?

Why would anyone throw good money after bad--by paying premiums to an insurance company that is not paying benefits, not allowing withdrawals, and not allowing borrowing against a policy?

This is the action advised by Kevin Foley of the New York State Insurance Dept. ("Are you really insured?" Cover Story, Aug. 5).

Isn't witholding the premium (to the extent of a policy's cash value) the only way that one can borrow under such circumstances?

Although you mentioned the possibility of litigation against insurance companies, you did not mention the use of arbitration. Since virtually all stock brokerages have aggressively sold life insurance and annuities for the past decade, they are vulnerable to their clients for not doing their due diligence related to suitability and quality.

A. Grant Bohl

Sarasota, Fla.

Before it's here, it's on the Bloomberg Terminal.