Deceased father’s life insurance policy on me – advice

Hi, I’m in need of some of advice. Hopefully I can make this as succinct as possible. My father passed away in November. A couple of months ago, a family member who was going through his mail found something from a life insurance company addressed to me saying I owed money on it. I called the company and they wouldn’t give me any information over the phone. They mailed me a packet with paperwork to transfer ownership of the policy over to me. The policy was one my father took out on me where he was the named beneficiary. He didn’t name anyone else on it, hence the transfer of ownership paperwork.

In the meantime, I also got two bills from the company sent to me saying I am past due with paying them. When I called the company again to ask about this kind of walk me through it, they told me I am on there as the payer as my dad is deceased but they still won’t give me specifics because I’m not the policy owner. They did tell me that it is a whole life insurance policy and that there is a $79k loan against it because my dad borrowed against it multiple times.

I am conflicted about taking ownership of this policy as I have no beneficiaries so it doesn’t really benefit me in any way. If I could cash in the policy I would choose that option but as it was explained to me, I would have to declare that as income to the IRS. So for example, if the policy were for $100k, they would take $79k out of it, I would receive $21k but declaring $100k income to the IRS and therefore basically be paying that $21k to the IRS. So it would all be for naught.

Is there a way to instead of cash in, roll it over to a retirement account for myself? My thoughts are also if the policy is worth say a million dollars, then owing $79k isn’t that bad but if it’s worth $100k like my example, it wouldn’t be worth it at all. Hopefully that makes sense? Any advice is very much appreciated. I seriously do not know what to do here.

submitted by /u/Lanky_Solid9200
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