Agents calling to purchase Adjustable Flexible Premium Life Insurance Policy

My father has a $250,000 Adj. Flex. premium life insurance policy that he bought in the early 1980's. He is 79 years old now and is getting calls from an agent to sell his policy back. Actually, the agent has called every year for the past three years. Dad has been paying $358 per month and was told that he needs to start paying $1300 per month now to be able to keep the policy since the policy is not worth much anymore. We are both confused. The agent is offering my dad $44,000 to buy his policy. My father wants me to talk to the agent. What questions should I ask him? I have been doing some research on this kind of policy. I guess his policy could lapse by 2014 if he doesn't start paying the higher premium. Do insurance companies badly mismanage the money where the policy eventually fails? If the policy is so bad, how come he keeps calling to buy it and keeps raising his purchase price?
Thanks

Agents don't buy policies. It's probably an attempt to talk to your father into a "viatical settlement" or "stranger owned life insurance" (SOLI). Take a few minutes to google it and it will all become clear.

Get the agents license number and affiliation. Ask the company to run an in-force illustration. Do you know that cash surrender value? More than likely, the agent is trying to do a Life Settlement.

This is where he gets a company (Coventry is a big one) to pay you to transfer ownership of the policy. The agent gets paid to bring the clients into the equation.

This seems very low to me as far as death benefit. It is really not worth the risk to go so low for a possible Life Settlement. However, if the agent really is the one wanting to purchase it...I do not think I would consider it.

Wait for your in-force illustration and then get a second opinion.

Where in So. Cal are you located?

What are the disadvantages of these types of settlements!

they are immoral. they are betting on the life of your father ... and betting he will die as early as possible. they are GREAT for making money though, 100% guaranteed investment.

hmmmm, i thought life insurance was a stupid investment.

The disadvantage (besides the "icky" factor alluded to by 1mo) is that you lose the insurance coverage. That may not be bad if you'd rather have the cash and are tired of paying the premiums and it's sure better than letting it lapse (although there may be a cash "surrender value", which the OP should look into.)

To the OP- I wouldn't call it mismanagement of funds by the insurer. I would guess it was over-optimistic sales projections. This type of policy invested a portion of your premium- probably mutual-fund type investments. The idea was that if the pile being invested got big enough and the investment income grew sufficiently, it would be enough to pay the premiums. In the case of your father (and many others), that didn't happen. Laws have changed since then and there are a lot more restrictions on how rosy you can make your projected results in the illustrations used in sales presentations. The viatical settlement industry grew partly to take these policies off the policyholders' hands. The middlemen get a fat fee, though, so you should also look into whether your father would get any cash value back if he just stopped paying premiums.